Malaysian share prices closed 0.9 percent higher on Friday as record crude oil prices supported palm oil stocks which led gains, dealers said. They said hopes that the government would scrap a windfall tax on crude palm oil (CPO) fuelled buying.
The Kuala Lumpur Composite Index closed up 11.11 points at 1,267.65 on volume of 517.44 million shares worth 1.23 billion ringgit (384.4 million dollars). Advancers led decliners 401 to 244, with 260 stocks unchanged. At the close, the ringgit was quoted at 3.1405/1410 against the dollar.
Dealers said expensive prices of crude oil could drive up demand for palm oil, as it finds favour as a source of eco-friendly biofuel. New York's main oil futures contract, light sweet crude for delivery in May, hit a record high of 115.54 dollars per barrel overnight.
Ang Kok Heng, chief investment officer at Phillip Capital Management said palm oil stocks performed well as crude oil prices remained high. "The outlook for the plantation sector remains good because of CPO's close correlation with crude oil prices. Palm-based biodiesel would be more feasible if crude oil prices remain high," Ang said.
Sime Darby, the world's largest palm oil producer, climbed 2.1 percent to 9.55 ringgit while IOI Corp, the second largest plantation stock in Malaysia, advanced 2.7 percent at 7.50 ringgit. Another palm oil giant, Kuala Lumpur Kepong gained 1.2 percent at 16.70 ringgit. Among heavyweights, Telekom Malaysia rose 2.8 percent to 11.10 ringgit, Maybank eased 0.6 percent to 8.15 ringgit and Tenaga was unchanged at 6.95 ringgit.
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