We are negative on the proposal to set up a steering committee at FGV as it will create an additional layer of cost in the group, which FGV is working hard to cut to improve its earnings performance. The introduction of a steering committee, placed above the board, will not be viewed positively by the market as the objectives of the committee may differ from that of the listed entity, which is to create value for shareholders. We view this as the second negative development to have affected sentiment on FGV shares. Our third concern is the 50% year-to-date jump in raw sugar price to 22 US cents per lb (RM2.04 per kg). FGV shares have appreciated 59% since May 16, 2016.

Source: The Edge Markets November 01, 2016 02:13 UTC