Olam International Rebounds as Temasek Keeps Key Stake

Olam International shares rebounded Thursday, recouping some of the losses in previous sessions as Singapore state investment fund Temasek said it was keeping its 16 percent stake in the farm commodities trader.

Muddy Waters Research, a US-based shortseller, had sent the stock plunging after it warned that the Singapore-based Olam was in danger of collapsing like US energy trader Enron.

Olam shares closed four percent higher at Sg$1.56, but analysts warned of further volatility.

Despite the gains, the stock is still down 10 percent since Carson Block, the influential founder of Muddy Waters, told an investment conference in London on November 19 that he was betting against the company.

Muddy Waters on Tuesday released a 133-page report supporting Block's criticism of Olam's accounting practices, debt levels and business model.

Olam fired back with a 45-page rebuttal on Wednesday and its chief executive Sunny Verghese followed it up with a conference call with the media and analysts in which he thanked Temasek for its support.

Olam International Ltd. Recommended to Sell

Religare Capital Markets downgraded Olam International Ltd to 'sell' from 'buy' and cut its target price to S$1.40 from S$2.40, as it expects the commodity trader's shares to be weighed down by concerns raised by short-seller Muddy Waters.

By 0426 GMT, Olam shares were down 0.96 percent at S$1.55, off an intraday low of S$1.465, which was a three-and-a-half year low. Its shares have plummeted 27.5 percent since the start of the year, compared with a 13.5 percent rise in the Straits Times Index.

"Olam shares will face difficulty re-rating upwards and sustaining even a moderate earnings multiple for the next few quarters, even if the financial risks Muddy Waters warns of don't materialize," Religare said in a note.

The brokerage noted Olam's guidance that it won't be generating positive free cash flow until 2015, making it hard for the company to completely dispel the concerns raised.

Most Undervalued Stock at SGX Singapore Exchange

Boustead announced earning growth of 43% for 1Q2012. This earning growth rate is fantastic! Many companies are not able to produce this kind of earnings in this challenging environment.

Today Boustead is trading at $0.9650. This stock has since appreciated 17%. In addition this stock pays a dividend yield of 7% based on our entry price. This means that while we are waiting for the stock to appreciate in value, we are being rewarded 7% dividend per year.

In our opinion Boustead is one of the most undervalued stock at Singapore Exchange.

Straits Times Index - Weekly Overview (19-23 Nov)

Weekly Technical view on STI

Weekly wrap of STI:

After 3 weeks straight fall, STI traded above its 50 week MA level this week and recovers some losses.

STI opens its 50 week MA level @ 2967.08, and then it turns back to lower level and made a low @ 2953.43 and took support @ this level. After taking support its 50 week MA level STI recovery sharply and made a week high @ 2993.37, finally closed @ 2989.28 with gain of 43.65 points up by 1.48% wow basis.

Macro economic factors:

• Singapore's inflation rate eased to 4.0% in October from 4.7% the previous month.
  This slower-than-expected increase in the consumer price index was mainly due to smaller gains in transportation and housing costs.
• The core inflation rate, which excludes transport and accommodation costs, fell to 2.2 % in October from 2.4 % in September. 
• The preliminary HSBC China Manufacturing Purchasing Managers Index, a measure of nationwide manufacturing activity, rose to 50.4 in November compared with a final reading of 49.5 in October, HSBC Holdings said on Thursday. A reading above 50 indicates growth

Singapore Stock Picks, Trading Strategy - 23 Nov

Trading Strategy for 23-Nov 2012

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SGX Stock Recommendations For Today 22-Nov

Stock Name: Petra
Company Name: PETRA FOODS LIMITED
Research House: OCBC Price Call: BUY Target Price: 2.98

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: OCBC Price Call: BUY Target Price: 13.34

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST
Research House: OCBC Price Call: BUY Target Price: 2.38

Singapore Stocks News - Factors to Watch

CapitaMall Trust

CapitaMall Trust (C38U.SG) is planning to raise US$167 million by selling 100.5 million units in the real estate investment trust.

CapitaMall Trust

Olam International Ltd. (O36.SG) has initiated legal action in Singapore’s high court against Muddy Waters LLC and its founder, Carson Block, for statements made at the Sohn London Investment conference in London.

Straits Times Index - Trading Strategy for 22 Nov 2012

Market Review - End of Day Summary 21 Nov

Singapore share opens in ease with some points of loss and then traded with good movement.

STI opens @ 2955.41 and then made a day low @ 2953.43 , took support @ lower levels and recovers losses and made a day high @ 2967.29 , after making high it suddenly fell again and then recovers and finally closed @ 2960.30 with gain of 1.48 points up by 0.05%.

In the broader market, volumes were lower at 1.9 billion shares, compared to Tuesday's 2.2 billion. Gainers beat losers by 192 to 177.

STI Singapore - Market Outlook for 20 November 2012

Although the STI managed to cover the gap resistence in mid week, the bearishness in Europe hampered it rebound and caused it to retrace again. The retracement went deep and the STI eventually broke its support to trade lower. On the technical charts, various indicators currently show the STI weakening with a possible downward momentum to test it’s next level of support at 2683 points. 

What to watch out for: Bullish: 

whipsaw and trade back above 2755 

Next resistance to watch: 2904 

Bearish: continue to go lower 

Next support to watch: 2683

SGX Stock News - Trading Recommendations for 19-Nov 2012

Maybank Kim Eng said it expects office rents in Singapore to slide by 10 percent in 2013, after falling 12-15 percent over the past four quarters, as demand in the near term is set to remain weak.

Marina One and DUO, two mixed use developments that will come onstream five years down the road, are seen adding nearly 2.5 million square feet of prime Grade A office space, Maybank said.

"However, office players are in for a tough time as they face stiff competition from other Grade A developments completing from now till 2017, which may exert more downward pressure on rents in the near term," Maybank said.

The broker added that the Singapore economy experienced a contraction in the third quarter from the previous quarter, and the government is guiding for subdued growth of 1-3 percent next year.

Maybank maintained its 'hold' rating on Keppel REIT and Singapore Land Ltd. It has a 'sell' call on CapitaCommercial Trust.

SGX Singapore - Stock Recommendations for 16-Nov

Stock: Sheng Siong (SHENG SIONG GROUP LTD)
Recommended by: OCBC
Recommendation: BUY
Target Price: S$0.49

Stock Name: VizBranz (VIZ BRANZ LIMITED)
Recommended by: OCBC
Recommendation: BUY
Target Price: 0.74 

Stock Name: BreadTalk (BREADTALK GROUP LIMITED)
Recommended by: OCBC
Recommendation: SELL
Target Price: 0.49 

Stock Name: KS Energy (KS ENERGY LIMITED)
Recommended by: OCBC
Recommendation: HOLD
Target Price: 0.78