KUALA LUMPUR (July 19): Shares in Felda Global Ventures Bhd (FGV) surged to its highest point since February this year in the early trades today, as investors anticipate the integrated palm oil producer to post better earnings for the April to June period (2QFY16).
At 10.31 a.m., the stock narrowed its gain to trade at RM1.69, rose two sen or 1.2%, with 7.87 million shares traded.
It had earlier climbed by six sen or 3.59% to a high of RM1.73, shortly after opening bell. The upward trajectory began on July 8, which saw it up by 27 sen or 18.49%, from RM1.46.
Nevertheless, analysts are of the view that the gain in FGV's share price was not backed by fundamental.
"Although the newly-appointed CEO Datuk Zakaria Arshad has shared his vision and strategy, the real result has yet to be seen," said a local bank backed analyst.
"There were also speculations on possibility of early general election..... FGV as a govenrment linked agency stands to benefit from the event," the analyst added.
Meanwhile, another analyst with local brokerage firm remained his Neutral view on FGV, saying the main re-rating catalyst of the stock would be the upcoming 2QFY16 result.
"There is possibility that FGV could perform better in 2QFY16, given their fresh fruit bunches (FFB) production is believed to be better than first quarter," he said.
In an interview with a local daily recentty, Zakaria had shared that he will focus in the downstream business (hiliran) to boost the group's profitability.
According to him, the downstream products such as cooking oil are fetching a better margin and enjoying a stable demand, as compared with the sales of crude palm oil.
"This is my immediate focus. FGV can't rely on the sales of crude palm oil (to generate profit), as the commodity price is volatile," he added.
FGV (5222) - Hot Stock: FGV extends gains as investors anticipate better 2Q results
http://www.theedgemarkets.com/my/article/fgv-extends-gains-investors-anticipate-better-2q-result
