Palm oil surged to a record on speculation supplies for food and alternative fuel will be limited after Indonesia, the world's biggest producer, announced it would raise export taxes if prices climb further. (Bloomberg, 5 February)
Indonesia plans to impose a 20 or 25 per cent export tax on crude palm oil and its by-products if international prices hit US$1,200 and US$1,300 a tonne, a deputy minister at the chief economics ministry said yesterday. Couple this announcement with the US soy oil markets hitting a record high the previous day, it sure seems like a good time to ride the wave*.
This news certainly has a positive impact on Malaysian plantation stock prices today (the momentum only got going after the afternoon bell though!). Can this spark an (ultra-short) Chinese New Year rally? Or are we going to see a Chinese New Year-Election back-to-back rally?
On the whole, investors are still cautious. This is reflected in today's thin trading volume.
*However some traders would argue, given today's uncertain economical climate, any rally automatically becomes an opportunity to sell.
Indonesia plans to impose a 20 or 25 per cent export tax on crude palm oil and its by-products if international prices hit US$1,200 and US$1,300 a tonne, a deputy minister at the chief economics ministry said yesterday. Couple this announcement with the US soy oil markets hitting a record high the previous day, it sure seems like a good time to ride the wave*.
This news certainly has a positive impact on Malaysian plantation stock prices today (the momentum only got going after the afternoon bell though!). Can this spark an (ultra-short) Chinese New Year rally? Or are we going to see a Chinese New Year-Election back-to-back rally?
On the whole, investors are still cautious. This is reflected in today's thin trading volume.
*However some traders would argue, given today's uncertain economical climate, any rally automatically becomes an opportunity to sell.
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