IOI is still a good counter for accumulation

Though price of CPO has gone into uncertain level but analysts say IOI is still a good counter for accumulation. This is mainly due to its downstream activities in the plantation industry. The main contributor is its oleo-chemical manufacturing which is the largest in the world. IOI’s main markets are Europe, Japan and US – the risk of default is low.

Though IOI has suffered about 100 mln of forex loss but analysts say the balance sheet is still strong.

According to Macquarie, the appeal of IOI lies in its well-managed estates which registered a 20% higher fresh fruit bunch yield among listed companies.

Though its 2Q2009 results may be weaker due to lower CPO prices but analysts still view IOI as a top pick plantation counter with defensive earning and ability to ride through volatile times.

Meantime, IOI’s prices were capped by its 5-Day and 10-Day Average which is around 3.16 its next resistance should be its previous high at 3.34. It has a strong support around 2.95 its Bollinger Mid Band.