Reuters: Hot Stocks: STOCKS NEWS MALAYSIA-Kenanga downgrades plantation sector to neutral

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STOCKS NEWS MALAYSIA-Kenanga downgrades plantation sector to neutral Aug 6th 2012, 03:11 Sun Aug 5, 2012 11:11pm EDT KUALA LUMPUR, August 6 - Kenanga Research downgraded Malaysia's plantation sector stocks to 'neutral' ahead of what it expects to be a weak results season and lower crude palm oil prices. "We estimate that CPO prices will need to reach another new high of 3,300 ringgit in 2012 for most planters just to maintain their same earnings achieved in 2011," it said in a research note on Monday. Five of the seven plantation stocks Kenanga covers are expected to report below-consensus earnings in quarterly results due this month. The five are KL Kepong Berhad, Genting Plantations Berhad, IJM Plantations Berhad, TSH Resources Berhad and Ta Ann Holdings Berhad. Tree stress is taking a toll across the sector, Kenanga said, citing crude palm oil production in the first half of 2012 which came in 7 percent below its own estimate. At 10:48 am, KL Kepong was down 0.16 ringgit at 23.26 while TSH Resources and Genting Plantations were unchanged at 2.64 ringgit and 9.29 ringgit respectively. IOI Corp Berhad was down 0.01 ringgit at 5.17 ringgit and Sime Darby was up 0.01 ringgit at 9.82 ringgit. The FTSE Bursa KLCI index was up 5.89 points at 1640.84. (Reporting by Siva Sithraputhran in Kuala Lumpur; siva.sithraputhran@thomsonreuters.com)

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