Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
Research House: Deutsche Bank
“The correction in soft commodities year-to-date and corresponding equity underperformance provide an attractive broad-based buying opportunity," said Nomura in a report.
Company Name: OLAM INTERNATIONAL LIMITED
Research House: Deutsche Bank
Shares of Singapore-listed commodity firm Olam International (OLAM.SI) rose as much as 4.9% on Wednesday as brokers said outlook remains positive and its valuations are attractive after the recent correction in soft commodity prices.
At 11:16 a.m., Olam shares were 3.8% higher at $2.75 with over 9.5 million shares changing hands. But they have fallen 12.4% since the start of the year, under performing the Straits Times Index’s <.FTSTI> 5% decline.
At 11:16 a.m., Olam shares were 3.8% higher at $2.75 with over 9.5 million shares changing hands. But they have fallen 12.4% since the start of the year, under performing the Straits Times Index’s <.FTSTI> 5% decline.
“The correction in soft commodities year-to-date and corresponding equity underperformance provide an attractive broad-based buying opportunity," said Nomura in a report.
It said Olam’s recent investments in a fertiliser project in Gabon and a sugar refinery in Nigeria could be a substantial boost to its earnings.
“Olam has lagged on concerns over accounting reclassifications, and export incentives. We think that this correction has been overdone...it is trading at extremely attractive valuations,” said Nomura.
Deutsche Bank also highlighted that Olam’s geographic and product diversification has helped to limit its exposure to countries facing unrest.
However, Deutsche cut its target for Olam to $3.20 from $3.60, to factor in market risks, but kept its buy rating.
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