KUALA LUMPUR: ECM Libra Research continues to have a Trading Buy call on IOI Corp as crude palm oil (CPO) prices have already corrected and appear to be rising again.
The research house said on Thursday, Oct 27 while it doesn’t expect prices to strengthen significantly in the long term, there could nonetheless be some adjustment back to the RM3,000 a tonne level if more news on the La Nina emerges in the market in coming weeks.
However, it also said prices could also weaken further if there is more news on improving soybean supplies with ongoing South American plantings.
“Whatever the case, we view it to be a trading market at the moment and IOI makes for a good proxy given their healthy liquidity.
“Our target price of RM6.11 is unchanged based on FY12 P/E of 20.4x which represents mid-cycle valuation,” it said.