Kenanga Research keeps ‘perform’ call on FGV

KUALA LUMPUR: Kenanga Research said it does not foresee any sharp share price movement in FGV Holdings Bhd following the appointment of chairman Datuk Azhar Abdul Hamid as interim chief executive officer (CEO).

It said FGV’s share price had corrected significantly while potential share price upsides could be dependent on affirmative action once the key management was in place.

“We are ‘neutral’ on this news, pending the confirmation of a new permanent CEO. We expect business to continue as normal as FGV is still managed by a capable team and interim CEO,” it said in a research note yesterday.

Kenanga Research also expects FGV’s business outlook to be in focus once the new leadership is in place.

“We maintain a market ‘perform’ call with target price of RM1.60 for now.”

However, Kenanga Research said it might lower its target price and valuations in the near term in light of a weaker crude palm oil price outlook, earnings volatility and confirmation of key management positions.

In a filing to Bursa Malaysia, FGV said the appointment was effective on Wednesday.

“The Special Board Committee 2, which took over the responsibilities to perform the functions of the group president/CEO since September 18, is hereby disbanded,” it said.

Azhar’s appointment came after the resignation of Datuk Zakaria Arshad as group president and CEO on September 18.

On October 18, FGV appointed group finance division head Aznur Kama Azmir as acting group chief financial officer.