Thursday, March 25, 2010

DJ MARKET TALK: Malaysia Plantation Stocks Ignore Biodiesel Plan

0321 GMT [Dow Jones] Malaysian plantation stocks little changed as government's plan to make sale of biodiesel mandatory in stages from June 2011 fails to spur interest; plan calls for diesel to be blended with biodiesel derived from palm oil at a 95%:5% ratio, with blend to be introduced in several central Malaysian states before being gradually expanded nationwide; analysts estimate implementation of 5% blend would absorb up to 500,000 tons of palm oil annually, equivalent to 3% of Malaysia's annual palm oil production. "The government has been saying for a number of years now that they want to introduce biodiesel, but past target dates for implementation have come and gone. The market is obviously skeptical about this latest mid-2011 implementation target," says analyst at local brokerage. KL Plantation Index flat at 6412.34; IOI Corp (1961.KU) unchanged at MYR5.41, KL Kepong (2445.KU) down 0.1% at MYR16.36.

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