Company Name: GOLDEN AGRI-RESOURCES LTD
| Research House: OCBC | Price Call: BUY | Target Price: 0.81 |
OCBC Investment Research raised its target price for palm oil firm Golden Agri-Resources to $0.81 from $0.74 and kept its ’buy’ rating, citing a possible recovery in crude palm oil (CPO) prices.
By 9:14 a.m., Golden Agri shares were flat at $0.72, and have gained 0.7% since the start of the year, underperforming the benchmark Straits Times Index’s 12% rise.
Golden Agri, the second largest palm oil plantation owner in the world, stands to benefit from a rebound in CPO prices, OCBC said.
“We believe that a recovery of CPO prices is likely, given the concerns over the impact of a prolonged drought in the U.S. mid-west, affecting the potential supply of soybean crop,” OCBC said in a report.
Soybean and CPO prices have a strong correlation of 0.85, indicating that CPO prices will likely mirror a rise in soybean prices, it added.
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