Palm oil stocks led Singapore shares lower at midday on Thursday as analysts expect crude palm oil prices may have limited upside in the near term following a strong rally.

Caution has also returned to the Singapore stock market with investors looking for cues from company results, which are likely to be announced in the next few weeks. Sentiment was also hit as Asian stocks fell due to poor earnings from Wall Street giants. 

 

“Crude palm oil prices, while relatively high at this point in time, would continue to hold for the next two quarters because the supply is likely to be restrictive for the first half,” said Selena Leong, an analyst at DMG & Partners Research.

Leong added that prices may soften in the second half of the year as the market factors in a potential bumper harvest during a period of peak production.

 

Shares of palm oil firm Golden Agri-Resources (GAGR.SI) fell as much as 2.6% after J.P. Morgan, which has an “underweight” rating on the stock, said it looked fully valued and there was limited upside to crude palm oil prices.