FCPO UP!! LUMBER PRICE UP!! WHAT TO INVEST? INVEST JTIASA OK OR NOT?

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Today market happening - aside from Coronavirus or Covid19, vaccine for covid 19 or booming gloves industry, something to take note on the raising commodity prices of Palm Oil and the Timber / Lumber should be taken into every investor alert list

FCPO had been raising with continuous purchase from Middle east, India, China and European countries. The trend is looking for FCPO to trade nearer to 3000 for a longer period of time, which will be beneficial for palm oil producer with the price staying at the higher range for a longer period. The subsequent effect of this will see palm oil industry player reporting better earning and profits, hence higher share price.

Another thing to take look is the madness surge up of the Lumber Futures in the global market.

The steep surge in LUMBER FUTURES is from a set of event that contribute to this.

1. LACK OF SUPPLY FROM CANADA PINE FOREST DUE TO BEETLE INFESTATION ON PINE TREE.

2. SAWMILL OFFLINE DUE TO ASSUMPTION THAT PLYWOOD DEMAND WILL DROP DUE TO COVID19 LOCKDOWN

3. LOCKDOWN ACTIVITIES IN US HOUSEHOLD ENCOURAGES DIY PROJECT, CONSUMES MORE PLYWOOD (TIMBER)

4. LATEST EFFECT FROM HURRICANE LAURA PUT IN BIG DEMAND FOR REBUILDING

5. JAPAN REBUILDING FROM TYPHOON HAGIBIS 2019 

Sources

beetle infestation - https://www.bloomberg.com/news/features/2020-08-17/mountain-pine-beetle-infestations-are-killing-forests-could-worsen-emissions

hurricane laura - https://edition.cnn.com/2020/08/28/us/satellite-images-hurricane-laura-before-after-trnd/index.html

Japan Hagibis rebuilding - https://www.mida.gov.my/home/9788/news/plywood-makers-may-see-rebound-in-exports-to-japan/

The LUMBER FUTURES will not be looking to come down fast due to government all over the world will be pushing more infrastructure development to boost up economy and GDP. TIMBER CONSUMPTION WILL CONTINUE TO MAINTAIN HIGH.

IF YOU INVEST IN COMPANIES DEALING WITH EITHER 1 OF THIS INDUSTRY, OR FOR BETTER, BOTH ALSO INVOLVED, YOU ARE MOST PROBABLY IN GOOD HANDS.

ONE COMPANY THAT I THINK WILL BENEFIT GREATLY FROM THESE 2 (HIGHER FCPO PRICE and HIGHER TIMBER PLYWOOD PRICE) WILL BE - JAYA TIASA (JTIASA 4383)

JTIASA have palm oil plantation, and also wood based product and harvesting.

Their output for AUGUST 2020 is not bad.

According to the chart analysis, JTIASA is on an uptrend, with a good entry point.

JTIASA is a good company to get some exposure for the trend. The company have good liquidity and will be an attractive target for investor and trader in the coming days.

Mid Term TP : RM 1.00

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