In the six months after its much anticipated listing, government plantation flagship stock Felda Global Ventures Holdings’ (FGV) performance on the market has resembled a roller-coaster ride.

Rallying to a high of RM5.55 in July 2012, the share spent most of 2013 below its initial public offering price of RM4.55, or hovering just above. And then in March, it quite suddenly shot up close to 20 sen to a three-month high of RM4.76. What gives?

For the most part, FGV’s sudden surge matches the rise in the plantation index, following clarity over the crude palm oil (CPO) price outlook.

Its lacklustre performance, too, has not been an isolated case.

Plantations counters have all been hit by low global demand for CPO, which has driven stockpiles up and prices down.

But while this is partly true, FGV’s downward spiral began in July. This is three months before other plantation counters showed the effects of shrinking CPO demand in October.

The story of the FGV stock, analysts believe, is more political than anything else.

Analysts admit that this was behind much of their calls in the early days of the FGV listing. Listing a government flagship in the lead-up to elections means that stakes are higher for it to succeed.

“The buy call, soon after the initial public offering (IPO), was mainly because it is a very big and high-profile listing. It was in everyone’s interest for it to go up,” Alliance Research vice-president of equity research Arhnue Tan said.

And it did.

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