IOI Corp., Malaysia's second-biggest palm oil producer, led gains by plantation stocks in Southeast Asia after prices of the tropical commodity rose for a fifth day, Bloomberg reported.
IOI jumped 14 sen, or 3.6 percent, to 4.04 ringgit at 9:21 a.m. local time, set for its highest close since Oct. 3. Sime Darby Bhd., the world's largest planter, added 1.9 percent, accounting for about one-third of the Kuala Lumpur Composite Index's 1.5 percent gain. Singapore-listed Wilmar International Ltd., the world's No. 1 palm oil trader, jumped 5.5 percent.
The Kuala Lumpur Plantation Index rose 2.8 percent to its highest since Oct. 6. Palm oil futures in Malaysia climbed 2.7 percent to their highest since Oct. 15 on Jan. 2, extending a four-day, 11 percent rally amid gains in crude oil.
Palm oil stocks are "tracking gains in crude oil and I'm following the momentum" by buying some of these shares, said Lye Thim Loong, who helps oversee about $500 million at Avenue Invest Bhd. in Kuala Lumpur. "Investors are having new money and putting them to work, looking for large-cap stocks, and many of them are found in plantations."
The price of palm oil in Malaysia, the second-largest producer, will probably stabilize during the next six months as the government moves to reduce stockpiles by cutting down plantations, the Star newspaper reported Jan. 3.
Peter Chin, minister of plantation industries and commodities, projects the price of the edible oil will settle at between 1,500 ringgit ($433) and 1,600 ringgit a ton, according to the report. Malaysia's palm oil exports rose 25 percent in December from the previous month, independent surveyor Intertek said on Jan. 2.
Malaysia's Kuala Lumpur Kepong Bhd. advanced 2.6 percent to 9.85 ringgit, set for its highest close since Sept. 23 and Singapore-listed Golden Agri-Resources Ltd. added 10 percent to 27 Singapore cents, headed for its biggest gain since Dec. 10.