Bumitama Agri (P8Z.SI) saw its stock soar by 3.65% in early trading on Monday, as investors react positively to the company's revised dividend policy and its strong position in the palm oil industry. The surge comes after OCBC Investment Research highlighted the company's increasing appeal as a dividend yield play.

The palm oil producer has recently updated its dividend policy, increasing the maximum payout ratio from 40% to a range of 40-60%. This move has caught the attention of yield-seeking investors, with the stock trading at a forward 12-month dividend yield of approximately 5% in recent sessions, according to OCBC analyst Ada Lim.

Bumitama Agri's strong fundamentals are also contributing to investor optimism. The company is known for its superior productivity and high-quality plantations, positioning it well to deliver above-industry average yields. Additionally, its continued focus on maximizing current plantations allows it to capitalize on supportive long-term industry fundamentals. Despite the positive outlook, OCBC maintains a hold rating on the stock with a fair value estimate of S$1.45, suggesting limited upside from current levels.