Palm | Kelapa Sawit

BURSA Malaysia closed flat yesterday as investors digested the full impact of Friday's earthquake and tsunami in Japan. Timber stocks, however, bucked the trend, while rubber and palm oil futures took a hit.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) closed 0.27 point lower to 1,495.35 points yesterday.

Timber-related counters rose after RHB Research Institute Sdn Bhd said timber companies are likely to benefit from a surge in demand from Japan as the country rebuilds after last week's earthquake and tsunami. Ta Ann Holdings Bhd added 8 sen to RM4.84, Jaya Tiasa Holdings Bhd climbed 16 sen to RM5.01 and WTK Holdings Bhd rose 7 sen to RM1.33.

A fund manager from TA Investment Management Sdn Bhd said the rise in timber stocks was quite benign.

On the converse, futures prices of commodities such as rubber and palm oil were pressed down.

August delivery for rubber, the most active contract on Tokyo Commodity Exchange, plunged 5 per cent to 383.5 yen a kg before settling at 384.1 yen (RM14.19), triggering a circuit breaker that suspended trading on all contract months. Japan, one of the world's top rubber consumers, mainly imports its rubber supply from Southeast Asia.

Taking the cue from Japan, the Malaysian Rubber Board's SMR 20 plunged 74 sen to RM12.85 per kg, while latex-in-bulk dropped 33.5 sen to RM9.49 sen per kg.

Palm oil prices also declined on concerns that Japan, one of Malaysia's top five clients, is facing difficulties receiving cargo as some of its ports had been destroyed by the earthquake and tsunami. Yesterday, the third month benchmark palm oil futures on the Bursa Malaysia Derivatives Exchange dropped RM29 to RM3,335 per tonne.

One trader said the bulk of shipment had to be re-routed. Another trader said the aftershock of the earthquake and tsunami may worsen. This could lead to a situation that warrants a declaration of "force majeure" and trigger contract defaults.

Mercury Securities head of research Edmund Tham said there is no certainty on the extent of damage at Japan's seaports. "There are no real figures out yet although Japan's logistic sector is hit hard."

Investors may have sold off some of their shares here to take profit but Tham said there were no major selldowns. "I don't see any major concern. If anything, the FBM KLCI is likely to trade rangebound over the next few days," he added.