Stocks on Friday was weighed down mainly by plantation counters following the US Customs and Border Protection’s (CBP) decision to impose a Withhold Release Order (WRO) on palm oil and palm oil products
from FGV Holdings Bhd, putting other plantation stocks at risk. NSTP/IQMAL HAQIM ROSMAN

KUALA LUMPUR: Stocks on Friday was weighed down mainly by plantation counters following the US Customs and Border Protection's (CBP) decision to impose a Withhold Release Order (WRO) on palm oil and palm oil products from FGV Holdings Bhd, putting other plantation stocks at risk.
However, plantation heavyweights such as Sime Darby Plantation and IOI Corp rebounded at the close, rising by four sen to RM4.83 and one sen to RM4.40, respectively, thus saving the index from further losses.

At closing, plantation index was down by 8.68 points, or 0.13 per cent, to settle at 6,906.81 points.
To recap, the US ban on imports of palm oil from FGV follows an investigation into allegations that FGV uses forced labour, the CBP agency said on September 30, 2020.
FGV had then issued a press release to emphasise that it was not involved in any recruitment or employment of refugees.
Furthermore, in response to the ban, FGV revealed on October that it has been communicating with CBP through its legal counsel and has submitted evidence of compliance with labour standards, to which FGV is committed.
CGS-CIMB said it is negative on this event as this will restrict market access for the sale of FGV's palm oil through its refineries or joint ventures, which are involved in the refining and oleochemical business.
In 2019, FGV derived 5.3 per cent of its total revenue from US and Canada.
The research firm said the bulk or 56 per cent of revenue came from Malaysia, 10 per cent from India, seven per cent from Pakistan, 4.3 per cent from China, 2.5 per cent from Europe and 15 per cent from others (mainly Asia).
In 2019, US's share of total global palm oil imports was not big at 2.7 per cent or 1.49 million tonnes.
"However, the concern is that this may lead other countries or customers of FGV to reassess their purchase of palm oil from the group as a result of concerns about environment, social and corporate governance (ESG) practices," the research house said in a note.
CGS-CIMB has reiterated its "hold" call on FGV with a target price of RM1.21.
AxiCorp chief global market strategist Stephen Innes said the ban should provide a stern warning to other crop plantations in Malaysia that the eyes of the world are on them.
"FGV could have been the more visible scapegoat here to send a strong message to Malaysia growers.
"We sill see be a bit of contagion into other plantation firms initially, but I am sure the owner will be moving into full 100 per cent compliance with employment standards.
"In the meantime, other firms will pick up the FGV slack," he said.
Meanwhile, trading on Bursa Malaysia was mixed on Friday amidst the muted regional markets, as China, Hong Kong, Taiwan and South Korea's markets were closed for their respective national holidays, as well as investors taking profit ahead of the weekend.
At the closing, the FBM KLCI added 3.53 points to 1,500 from 1,496.77 recorded at Thursday's close. The index opened 1.93 points lower and hovered between 1,489.66 and 1,501.85 throughout the day.
The upcoming week may see cautious trading following news that the United States (US) President Donald Trump and his wife Melania had tested positive for the Covid-19 virus, exacerbating the uncertainties in the run-up to the US presidential elections next month.

 https://www.nst.com.my/business/2020/10/629143/plantation-counters-showed-some-rebound-after-us-wro-fgv
Sumber : New Straits Times