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Monday, December 28, 2009

London Sumatra recorded the top gain: CPO stock price potentially to rise next year

as published in Bisnis Indonesia daily newspaper
Monday, 28/12/2009 00:00 WIB
London Sumatra recorded the top gain
CPO stock price potentially to rise next year

JAKARTA: The stock price of PT PP London Sumatra Plantations Tbk booked the top return in a year reaching 176.92 percent if compared to the seven emitters resulting CPO.

Bloomberg data shows from early year up to December 23, 2009, the LSIP stock price rose 150 points into IDR8,100 and the market capitalization at IDR11.05 trillion from early the year up to Wednesday last week.

The second gainer is PT Gozco Plantations Tbk recording 158.28 percent returns and PT Astra Agro Lestari Tbk 126.53 percent. PT Sampoerna Agro Tbk, PT Tunas Baru Lampung Tbk, and PT SMART Tbk recorded consecutive returns at the level of 114.29 percent, 81.58 percent, and 50 percent consecutively.

The stock price of BW Plantation hitting preliminary the bourse per 27 October 2009 was set at the level of IDR550 or dropped into the level of IDR510 or lower than the stock price on the listing at bourse.

Portfolio Manager of PT Batavia Prosperindo Aset Manajemen Debby Handoyo said the soaring CPO emitter stock price is normal as the commodity is the raw materials for consumption goods manufacture. Goods production will not stop despite the worsening economy.

“It is not simply cooking oil and margarine as food, but also for soap and cosmetics for daily consumption,” she said to Bisnis this week.

The soaring stock price happened from early this year due to the convincing economy recovery following the economy crisis last year. With such credible economy growth, the stock price of the commodity is increasing.

The stock price grew in quarter III/2009 due to the commodity price optimism for next year rise.

“The stock price here is faster than the soaring commodity price noting that market players are confident with the soaring commodity price later.”

Debby said this happened to some emitters stocks, namely London Sumatra, Astra Agro Lestari, and Sampoerna Agro, with almost the same increase.

The potential stock price hike next year is great relating to the threat of El Nino and El Nina climate disturbances.

CPO price will mount with the potential climate disturbance as the production is disrupted amidst the remaining high demand.

However, Debby said the potential here will not as big as the stock price growth this year which is deemed extraordinary.

Research analyst of PT Reliance Securities Tbk Deo Rawendra said from early the year, the stock price is benefited by the commodity price which mounted along with the squeezed oil supply such as soybean oil.

The slight supply is due to the drought striking one of the largest soybean producers, Argentina, early 2009. the CPO price was affected by the soybean oil supply condition as the substitute product.

He also believes CPO price will improve in quarter I/2010 or semester I/2010 due to the potential threat of El Nino and El Nina.

Next year, investor will get more stock option variation as some emitters will execute corporate actions which could boost up the productivity, so as not simply to concentrate on Astra Agro stocks.

Some include London Sumatra that will build plant and Sampoerna Agro plant to acquire other areas.

Bakrie Sumatera stocks are not reflected by the corporate action or CPO emitter stock trend as it reflects more on the stock fluctuation sentiment among the business groups. (21) (redaksi@bisnis.co.id)

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