Recap on comment dated : Monday, October 26, 2009
CPO..stable because of weak USD
CPO price will be stable at above RM2180 as long as USD is weakening and picking up in exports figures. The export figures from 1-25 Oct 09 vs 1-25 Sept 09:ITS (+16%) and SGS (+6%).My notes dated 8-9-2009 on CPO already highlighted that US will adopt a weak currecy policy in order to boost its exports. This scenerio will continue for at least for the next 3 quarter until US government feel its economy is stabalised. The next indicator to watch out should be US interest rate. A weak currency will continue and will start to strengthen when US increase its interest rate.Short term startegy:1. If CPO break above 2240 level, next target should be 2285 before reach 2338.2. If CPO break below 2200 level, next target will be 2179 >> 2125Therefore, if CPO price down to 2100 or even lower, it would be safe to LONG for Jan2010 / Feb 2010 contract.
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Today CPO closed at Feb Contract: 2400 level
I believe any downward adjustment will be temporarily and it will trending upward to 2500 level toward Feb 2010.
Therefore, opportunity to invest in plantation counters for the next 3 months may provide 10-30% return. Top pick : Golden Agri (Indonesia company listed at Singapore SGD0.46)
Why?
1.) exposure to plantation sector since earning is picking up compare to early of this year
2.) riding on Singapore Dollar appreciation ( if you believe)
Golden Agri being the 2nd largest landbank plantation company in the world is doing well and continue to grow. Low gearing and having a good distribution channel in China.
Level 1 : SGD $0.50
Level 2 : SGD $0.55
Level 3 : SGD $0.60
20-30% potential return. Good Try!
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