OCBC raises Olam's target price

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 2.63

OCBC Investment Research has raised its target price for commodity firm Olam International to $2.63 from $2.05 and kept its hold rating.

By 9:17 a.m., shares of Olam were 2.3% higher at $2.70, and have fallen about 13.8% since the start of last year.

Olam’s shares have risen 24% since the start of the year, driven by liquidity and hopes that China will ease its monetary policy, OCBC said in a report.

Although the brokerage said outlook remains uncertain with the European debt crisis threatening to derail the world economy, Olam will be helped by firm demand for soft commodities from China, especially in essential food items.

As a result, OCBC now expects Olam’s valuation to be pegged to 18 times its earnings per share for the fiscal year ending June 2012, up from 14 times.