Kuala Lumpur: Sime Darby Bhd, the world’s largest listed producer of palm oil, has seen the foreign shareholding in the company rise to its highest level since August 2008.
Business Times understands that as at end of last month, foreigners owned 17.4 per cent of Sime Darby.
The flood of foreigners scrambling for Sime Darby shares have seen its market capitalisation increased significantly.
Jupiter Securities head of research Pong Teng Siew, however, is not surprised that Sime Darby has been receiving interest from investors lately.
“Sime Darby is a major blue chip ignored by the market for a long time,” said Pong, adding that he expected a little bit more upside for the stock.
Recent research reports also seem to suggest that there are some legs to the momentum play on Sime Darby.
Both Kenanga Investment and RHB Research came out with “outperform” ratings on Sime Darby. Kenanga has a RM10.85 a share target price on the stock while RHB Research has a RM10.40 a share target price.
For the first quarter ended September 30, 2011, Sime Darby’s net income climbed to RM1.07 billion from RM654.7 million in the same period a year ago.
Sime Darby had fetched an average of RM2,946 a tonne for its palm oil in the first quarter, up 17 per cent from a year ago.
Palm oil is the most used cooking oil in the world. The contract delivery for April stood at RM3,153 a tonne on the Malaysia Derivaties Exchange.
By Francis Fernandez, btimes.com.my
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