STOCKS NEWS SINGAPORE-JPMorgan downgrades Golden Agri to 'underweight'

Last Updated: Thu, Jan 17, 2013 03:50 hrs

J.P. Morgan downgraded palm oil firm Golden Agri-Resources Ltd to 'underweight' from 'neutral' and lowered its target price to S$0.50 from S$0.56, on expectations it will be hurt by a muted recovery in crude palm oil (CPO) prices.

By 0329 GMT, shares of Golden Agri were down 3.1 percent at S$0.62, and have fallen about 4.6 percent since the start of the year, compared to the Straits Times Index's 1 percent rise.

J.P. Morgan said it expects Golden Agri's fourth-quarter earnings to miss expectations, and forecast a 20 percent quarter-on-quarter decline in core net profit to $69 million as average CPO prices fell 23 percent in the period.

It also cut its 2013 and 2014 earnings per share estimates by 10 percent to factor in lower CPO prices.

Indonesian plantation companies, including Golden Agri, are expected to see meaningful labor cost increase following this year's rise in minimum wage, the brokerage said.

1131 (0331 GMT)

(Reporting by Charmian Kok in Singapore; Editing by Sunil Nair;; Reuters Messaging:


10:25 STOCKS NEWS SINGAPORE-CIMB raises Midas Holdings target price

CIMB Research raised its target price for Midas Holdings , which supplies components for train projects, to S$0.59 from S$0.53 and kept its 'outperform' rating, as its recent contract win reflects strong orders for the railway industry going forward.

At 0214 GMT, Midas shares were up 1 percent at S$0.525, and have gained 25 percent since the start of the year, compared to a 1.8 percent rise in the FTSE ST All Share Index.

Midas's 32.5 percent-owned associate Nanjing SR Puzhen Rail Transport Co. Ltd (NPRT) won a tram contract worth 338 million yuan ($54.37 million), adding to NPRT's order book of 9 billion yuan, CIMB said.

"This lends credence to our expectations of positive order flow momentum and could signify back-to-back contract win announcements and further re-rating potential," said CIMB, adding that major clients have restarted negotiations with key suppliers.

1016 (0216 GMT)

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