Wednesday, January 26, 2011

GMG - Bank of America-Merrill Lynch starts GMG Global at Buy; $0.50 target

Stock Name: GMG
Company Name: GMG GLOBAL LTD
Research House: BofA Merrill Lynch


Bank of America-Merrill Lynch starts GMG Global (5IM.SG) at Buy with a $0.50 target.



The house says the stock offers a 75% potential upside and new target price implies FY2011 price earnings of 15.5X. “Rubber is the new black” and that GMG is the “world's pure rubber play,” the house says. 



It adds, the rubber sector is facing a severe supply shortfall after several years of underinvestment. “With the rising demand driven by China and India auto, we expect the rubber price rally to last till 2012, especially as we enter the winter season for rubber in 1H 2011.” 

The stock is +7.0% at $0.305.

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