KUALA LUMPUR (Sept 9): Plantation shares rose, tracking broader market gains and following news of a planned price-stabilisation mechanism by the Malaysian and Indonesian governments to address falling crude palm oil (CPO) prices.

Among plantation firms, Kuala Lumpur Kepong Bhd rose 24 sen or 1.2% to RM21.08 at 3.31pm. Earlier, the counter reached an intraday high of RM21.28, placing it among Bursa Malaysia top gainers.

Genting Plantations Bhd rose 15 sen or 1.5% to RM10.02. The stock had earlier reached a high of RM10.10.

At 4.06pm, the FBM KLCI climbed 16.36 points or 1% to 1,603.48 as Asian share markets rose.

In a note today, CIMB Investment Bank Bhd said the price-stabilisation measures could help improve CPO price sentiment in the near term.

According to CIMB’s note, the scheme may comprise measures to cut oil palm output via replanting programmes, and initiatives to increase CPO demand through biodiesel mandates.

“If these measures are successfully carried out, it could help arrest the decline in prices in the short term. The impact on medium-term CPO prices will depend on the effectiveness as well as the implementation of the policies to be announced,” CIMB said.

Reuters reported that Malaysian palm oil futures hit a six-week high today, supported by short-covering and technical buying ahead of production data due tomorrow

By the midday break, the benchmark November contract on the Bursa Malaysia Derivatives exchange was 1.3% higher at RM2,119 (US$491) a tonne. Earlier, palm rose to RM2,132, its strongest level since July 29, and prices have now gained 6% this month.

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