KUALA LUMPUR (Dec 11): CIMB Research said it projected Malaysian palm oil stocks to increase 2% to 3.07 million tonnes at end-December 2018 from the preceding month as production is expected to exceed exports.

CIMB analyst Ivy Ng Lee Fang wrote this in a note after the Malaysian Palm Oil Board said yesterday the country's total palm oil stockpile rose 10.45% to 3.007 million tonnes in November from the preceding month's 2.72 million tonnes.

Ng said: "Malaysian palm oil stocks grew 11% m-o-m (month-on-month) to a new record high of 3.01 million tonnes as at end-November 2018 due to weak exports and higher imports. Although the record stockpile was largely expected, we do not think prices are likely to recover significantly as we project stocks to climb further in December. We maintain our 2018F/19F/20F CPO (crude palm oil) price forecasts of RM2,260/RM2,400/RM2,500 per tonne."

"Maintain 'neutral' call on the sector due to lack of catalysts," she said.

Meanwhile, Affin Hwang Investment Bank Bhd analyst Nadia Aquidah said today the research firm also maintained its "neutral" call on the plantation sector.

"Our top sector pick is Ta Ann (Holdings Bhd). We like Ta Ann as we expect an increase in earnings contribution from both the timber and plantation divisions as production and prices for timber products and palm oil products improve," Nadia wrote in a note.