Kenny Yee (Photo by Patrick Goh/The Edge)
KUALA LUMPUR (May 27): The banking and plantation sectors are areas that investors should look into in 2021, according to Rakuten Trade Research.
During its virtual second quarter 2021 Market Outlook (2Q21) Market Outlook media briefing today, Rakuten Trade head of research Kenny Yee noted that the banking sector is an engine of growth.
While the research house is unsure of the impact of the latest Movement Control Order (MCO 3.0), consensus remains rather positive on earnings growth of 29% in the calendar year 2021 (CY21) and 19% in CY22, said Yee.
“In fact, this is the only sector whereby earnings growth is consistent,” he added.
As for the plantation sector, Yee pointed out that Rakuten Trade Research has been recommending the sector since the end of last year, but noted that plantation stocks have not been moving.
“But yet, earnings for this plantation sector have been charting a record high, so I am also quite curious about this one [sector],” Yee added.
Yee said during his presentation the market is still not convinced about the strong crude palm oil (CPO) prices.
In CY20, there was solid earnings growth of 50%, while earnings growth appears to be at 14% for CY21 and 0% for CY22.
He pointed out that CPO prices are up RM700 a metric tonne year to date.
However, when asked about specific companies within the banking and plantation sectors that investors could look at, Yee said that he could not comment.
As of 11.33 am, the Financial Services index was up 0.3% or 45 points at 14,938.99. As for the Plantation index, it was the third top loser among the indices listed on Bursa Malaysia, declining by 0.31% or 21.69 points to 6,918.53.
CPO futures for delivery in June were down RM62 to RM4,377 a tonne. According to data from the Malaysian Palm Oil Board, spot prices as of yesterday stood at RM4,327 a tonne.
