FGV falls on profit-taking

PETALING JAYA: FGV Holdings Bhd gave up all its gains from Wednesday’s trade to close at RM1.27 after the Federal Land Development Authority (Felda) said it would be reviewing the land lease agreement (LLA) it has with FGV.

FGV’s shares gained three sen to close at RM1.30 on Wednesday after the Felda White Paper was released to the public.

But investors took the opportunity to profit-take yesterday after Economic Affairs Minister, Datuk Seri Mohamed Azmin Ali, said in Parliament that Felda was in discussions with the FGV management to revisit the terms of the LLA for a fairer deal.

Azmin had reportedly said that Felda should receive an annual payment of RM248mil plus a 15% share of plantation profits generated from the 99-year lease of its commercial land.

AllianceDBS Research in a report yesterday said that it did not think that the agreement would be revised at the expense of FGV.

“Any deal that would result in higher payments from FGV would unlikely be agreed upon by the shareholders of FGV. Felda would have to pay FGV compensation in accordance with the LLA’s terms and conditions if it intends to amend/terminate the agreement,” it said.

AllianceDBS has maintained its “buy” call on FGV with an unchanged target price of RM1.75.

Source : TheStar