Asian Palm Oil Fundamentals Still Bullish - CS

Last week's Massive sell down in Asian palm oil stocks occurred despite any real change in still bullish fundamentals, says Credit Suisse. "This is a reflection of investors unwinding a crowded trade, and the fact that the plantation stocks have been very resilient amidst a global equity sell down," broker says in note. Adds, "but its bullish fundamentals have not changed. Our view is that palm oil stocks will outperform over a 12-month view because there is a real shortage of edible oils and palm oil is one of the few inflation hedges." Says upside catalysts for palm oil price include fact soy oil at big premium, vegetable oil inventories still low, geopolitical risks could send crude oil price higher. Reiterates Overweight call on Asian palm oil sector, says Indofood Agri remains favored palm play. Rates Indofood Agri (5JS.SG) Outperform with S$3.28 target price; Wilmar (F34.SG) Neutral with S$5.40 target price. Latest prices; Indofood Agri down 0.5% at S$1.84, Wilmar +1.0% at S$4.14.