HOW WOULD THE MONEY GROW?
Not knowing how exactly he should grow the money, Afiq Firash contacted his cousin (Rauf) who is an engineer with an oil and gas company in Sabah for advice. Without hesitation, Rauf suggested an IPO (initial public offering) of Felda Global Venture Holdings (FGVH), which wass already opened for subscription since 31 May 2012. Right after the phone call, Rauf sent emails on some information about the company that he had collected for his own use. He told Afiq Firsah that he had submitted a subscription for 10,000 units under his own account and 5,000 more on his wifes. ATTACHMENTS FROM RAUFS EMAILS
Prospects in Palm Oil Industry
The oil palm tree, also known by its scientific name Elaeis guineensis, is a type of tropical plant that bears oil palm fruits. Each oil palm fruit comprises a hard shell known as the endocarp, a fibrous oil-bearing outer layer known as the mesocarp, and a single seed (nut) or kernel which is rich in oil. Oil palm fruits grow in bunches known as fresh fruit bunches (FFBs), and are crushed, fractionated and refined to produce two types of oils: palm oil and palm kernel oil (PKO). Palm oil (obtained from the mesocarp) and PKO (obtained from the kernel) have different chemical properties, and are utilized in a wide variety of food and non-food applications.
Throughout the years 2007 to May 2012 (Figure 1), average annual world prices of CPO and CPKO have largely moved in tandem with one another, with CPO recording the lowest prices at RM1,553 per ton in August 2008 during the 6-year period being observed. From there, the palm oil price gradually increased until it reached highest price at RM3,801 per ton in February 2001. After that, the price drops again before it gradually increases after September 2011. Generally, CPO and CKPO prices are influenced by the availability of supply which is affected by factors including replanting patterns, weather conditions as well as pest and crop diseases. Additionally, the market forces plays their role, namely economic conditions, changes in regulatory conditions as well as pricing and availability of other types of substitute vegetable oils. These factors cause prices of CPO and CPKO to exhibit a cyclical growth trend historically.