Singapore Stock Market News

ASEAN Plantations - Indonesian biodiesel conundrum

StockFanatic
Publish date: Wed, 15 Jul 2015, 03:37 PM
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Indonesia announced that it will impose a levy on palm oil exports starting 16 July, after weeks of delay. We are positive that the government is progressing with its plans to lift biodiesel demand in the country. However, our concern is that the biodiesel subsidy of Rp600-700 litre may not be sufficient to cover the current biodiesel and diesel price gap in Indonesia, which we estimate to be at Rp913 per litre. This could affect the pace of implementation. We maintain our Neutral rating on the sector and continue to favour Genting Plantations and First Resources as our top picks.
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