KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Retain NEUTRAL with a higher target price (TP) of RM24.90 We had a meeting with Kuala Lumpur Kepong (KLK)’s management recently and came away with a steady view on the company’s outlook. Despite seeing strong CPO price performance, we think current valuation remains unattractive at 23x forward PER. Hence, we maintain our Neutral call but with a higher TP of RM24.90 (up from RM23.46) after rolling over our valuations to FY18. A rebound in FFB production. After experiencing an 8.1% drop in FY16 FFB production, the company expects to see a recovery in FY17 with a 3-5% growth. The growth will mainly come from Kalimantan Tengah, which has seen a dip for 2 consecutive years. Malaysian production may be struggling to see a recovery due to a lagged effect of El Nino’s impact last year. Targeting a steady production cost. Despite expecting an increase in fertiliser and labour expenses, the company targets to keep its prod...