Investors gamble on palm oil demand as Felda shares rise 19%

Published:  29 Jun at 6 PM

Malaysian palm oil company Felda has seen its shares surge during its debut as investors gamble on rising demand for its regional product. The company’s shares went up as much as 20 percent, reaching 5.46 ringgit on Bursa Malaysia, the Malaysian stock exchange.

The firm had generated 10.4 billion ringgit through its share sale--the globe’s second largest this year after social networking site Facebook. Malaysia is the globe’s second greatest palm oil producer. The palm oil business currently produces a yearly turnover of $16.6 billion, according to government statistics.

Requests for palm oil have been steadily rising during recent years, particularly from booming economies such as China and India. Palm oil is used in a wide array of products, including biofuel, soap and biscuits. Felda is one of the globe’s leading manufacturers of palm oil and experts say that investors anticipate being able to benefit from the increasing demand.

Analysts said the company had received the support of local institutional investors, raising the confidence of smaller-scale retail investors about its prospects, in spite of a recent fall in profits. Linda Koh, who is an analyst with InsiderAsia, said many people had been anticipating the IPO for a long time.