~ We are raising our regional plantation sector rating from Neutral to OVERWEIGHT following our 7-18% CPO price upgrades for 2010-11, 3-39% earnings upward revisions and 2-45% target price upgrades as we roll them over to end-2010.
~ We believe plantation stocks will outperform in the short term as CPO price prospects look rosy for 1Q10 due to supply worries and a pick-up in demand from CNY festivities, global economic recovery, a smaller domestic oilseed crop from India and increased biofuel mandates.
~ Singapore planters remain our top pick, followed by the Indonesian and Malaysian planters.
~ We are upgrading our call on Astra Agro, Bakrie Sumatra, London Sumatra, KLK and Genting Plantations.
~ For exposure to the regional plantation sector, we continue to recommend large-cap liquid planters.
~ Our top picks are Wilmar, Sime Darby, Astra Agro, London Sumatra, Indofood Agri, Sampoerna Agro and Golden Agri.
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