Stocks to watch: Plantations, ECM Libra , Sime Darby, Cymao

KUALA LUMPUR : Investors' focus will be on PLANTATION []s on Tuesday, Dec 8 after the plantation index chalked up strong gains, as crude palm oil prices rallied while a weakening US dollar spurred commodity rates.

On Wall Street, the major indices closed mostly in the red after comments by Federal Reserve Chairman Ben Bernanke sparked jitters about the economic recovery.

The Dow Jones industrial average ended up 1.21 points, or 0.01 percent, at 10,390.11. The Standard & Poor's 500 Index lost 2.73 points, or 0.25 percent, at 1,103.25. The Nasdaq Composite Index fell 4.74 points, or 0.22 percent, at 2,189.61.

At Bursa Malaysia, the Kuala Lumpur Plantation Index advanced 0.47% or 30 points to finish at 6,314.06, its highest in 16 months, helping to cushion the decline on Bursa. The FBM KLCI fell 0.38% or 4.84 points to 1265.36.

IOI Corp Bhd rose two sen to RM5.45, IJM PLANTATIONS BHD [] eight sen to RM2.58 and KUALA LUMPUR KEPONG BHD [] which added four sen to RM16.04.

Malaysian palm oil for February 2010 rose as high as RM2606 a tonne before settling lower at RM2559, down RM3 from a day earlier.

CIMB Equities Research analyst Ivy Ng Lee Fang said CPO prices might reach RM3,000 a tonne in 1Q next year due to less supply of the commodity. She anticipates CPO production will be stifled by dry weather due to the El Nino phenomenon, and crude oil rates will soar to between US$90 and US$100 a barrel.

"After considering all the bullish and bearish factors that could influence the CPO (crude palm oil) price in the coming year, we cannot help but feel that CPO prices will stay volatile in 2010," she wrote in a note to clients.

Prices of palm oil tend to rise in tandem with crude oil rates due to demand for food-based commodities as feedstock for production of biofuel, deemed a cheaper alternative to hydrocarbon resources.

As crude oil is transacted in US dollars, a weaker US currency, essentially, makes the commodity more attractive to global traders, hence, higher demand and prices for the hydrocarbon resource.

Other stocks to watch are SIME DARBY BHD [], CYMAO HOLDINGS BHD [], ECM Libra Financial Group Bhd and CB INDUSTRIAL PRODUCT HOLDING [] Bhd.

Sime Darby Bhd has acquired Nature Ambience Sdn Bhd for RM16.81 million which has rights to develop 26,211 ha of native customary rights (NCR) land in Sarawak.

Sime Darby said had acquired 50,000 shares in Nature Ambience from Common Enhance Sdn Bhd for RM16.81 million, financed from its own funds.

Cymao Holdings Bhd's subsidiary was awarded a log extraction licence covering 5,454ha in Bonggaya Forest Reserve, Beluran, Sandakan.

ECM Libra said its 3Q net profit more than quadrapled from a year earlier, helped, mainly by higher non-interest income during the period. Net profit of RM7.34 million in the quarter ended October 2009 compared to RM1.59 million previously. Revenue climbed 46.6% to RM29.76 million from RM20.3 million.

CB Industrial secured a USD8.6 million job to build a palm oil mill for Sime Darby Bhd's Indonesian unit PT Bhumireksa Nusasejati.

On Monday, ECM Libra closed unchanged at 63 sen while CB Industrial added 13 sen to RM3.05.

Maxis Bhd may boost the size of its loan as much as 33% to US$2 billion (RM6.8 billion) after gaining commitments from up to 12 banks.