Ukraine Crisis Burnishes Malaysia Palm, Energy Stock Prospects
Ukraine Crisis Burnishes Malaysia Palm, Energy Stock Prospects
(Bloomberg) -- Malaysia, a net exporter of crude oil and the world’s No. 2 palm oil producer, stands to gain from the record-smashing gains in global commodity markets sparked by Russia’s invasion of Ukraine, analysts say.
While the conflict has pushed Brent oil past $100 a barrel, palm oil topped 6,000 ringgit a ton for the first time ever on Thursday to extend a record-breaking run fueled by smaller output in the Southeast Asian nation.
MIDF Research reaffirmed bullish calls on the energy and plantation sectors, while the Kuala Lumpur-based TA Securities said a decline in local stocks would be a buying opportunity. Malaysia’s main KLCI Index has risen more than 5% so far in February, poised for its best month since August, amid optimism over the nation’s wide vaccine coverage and plans to reopen its borders.
“The attack on Ukraine won’t derail the current economic and corporate earnings recovery” in Malaysia, TA Securities said. The firm asked clients to accumulate as the KLCI Index enjoys strong support at the 1,500 level. MIDF kept its end-2022 target unchanged at 1,700 points.
The gauge climbed 1.1% to 1,591.72 at the close, with the index of palm oil stocks ending near its highest level since January 2018. Kuala Lumpur Kepong Bhd. rose as much 1.9%, while IOI Corp. jumped as much as 4.2%.
Oil and gas services firms also climbed on Friday. Dialog Group Bhd. gained 2.5%, Sapura Energy Bhd. rallied 12.5%, Petronas Chemicals Group Bhd. climbed 2.9%, and MISC Bhd. increased 2.9%.
©2022 Bloomberg L.P.