KUALA LUMPUR (May 26): Shares of MSM Malaysia Holdings Bhd fell 5.71% or six sen to 99 sen in early Friday (May 26) trade, after it closed near its 15-month high on Thursday.
The sugar producer's stock soared to RM1.05 on Thursday, the highest since RM1.08 on Feb 22, 2022, following the government’s announcement that MSM could sell fine white sugar at market price effective immediately.
At the time of writing, MSM shares were actively traded, with 10.73 million shares changing hands.
The counter saw 44.2 million in trade volume on Thursday.
Domestic Trade and Cost of Living Minister Datuk Seri Salahuddin Ayub on Thursday said the condition the government has imposed on sugar refiners to sell fine white sugar is that there must be coarse and refined white sugar supply of 42,000 tonnes a month.
Salahuddin said the existing ceiling prices remain on coarse and refined white sugar, which is at RM2.85/kg for coarse and RM2.95/kg for refined white sugar.
According to MSM, Malaysia’s sugar is the cheapest in the region, with the Philippines limiting its sugar price at RM8.50/kg, followed by Singapore and Vietnam both at above RM6/kg, Indonesia (RM4.40/kg), and Thailand (RM3.20 to RM3.50/kg).
In a note on Friday, BIMB Securities Research said the selling price of fine white sugar is expected to be RM4.20/kg, which would appeal to large industrial customers given the potential cost savings.
“We are cautiously optimistic on the new product though we expect demand to gain traction particularly next year given larger acceptance and understanding of its benefits,” BIMB said.
“We also acknowledge that demand for the product could potentially demonstrate resilience among the targeted market and customers, particularly the industrial users.”
The firm reiterated a “buy” call on MSM with a new target price of RM1.49 (previously 95 sen).