STOCKS NEWS SINGAPORE-Macquarie downgrades Olam to 'neutral'

Last Updated: Sat, Dec 08, 2012 18:51 hrs

Macquarie downgraded Olam International Ltd to 'neutral' from 'outperform' and cut its target price to S$1.60 from S$2.40, saying some of the Singapore commodities firm's projects are taking longer-than-expected to come through.

Olam shares were up 1.4 percent at S$1.47 on Friday. But the stock has fallen more than 15 percent since short-seller Muddy Waters launched a scathing attack on the company's accounting, debt and investment projects on Nov. 19.

"While we disagree with Muddy Waters' assertion that Olam stands on the brink of insolvency, we do take their point that some of Olam's new upstream and midstream projects have lagged expectations. In fact, as a group, the new projects had already missed our expectations in 2012 fiscal year," Macquarie said.

Muddy Waters discovered that Olam's greenfield Nigerian sugar mill has been postponed indefinitely, Macquarie said, adding that this has been confirmed by Olam. A key urea project in Gabon also remains uncertain, Macquarie said.

Macquarie said its earnings estimates are 20-25 percent below consensus for 2013-2014 fiscal years.

1523 (0723 GMT)

(Reporting by Eveline Danubrata in Singapore; Editing by Anupama Dwivedi;


STOCKS NEWS SINGAPORE-Index at 2-mth high, lifted by Hongkong Land, CapitaLand

Singapore shares rose to the highest in two months, lifted by Hongkong Land Holdings Ltd and CapitaLand Ltd on hopes of stronger property sales in China, whose economy is showing signs of picking up.

The Straits Times Index rose as much as 1 percent to 3,109.92 points, the highest intra-day level since Oct. 5. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.5 percent higher.

Shares of Hongkong Land rose as much as 4.4 percent to the highest since early August 2011, while CapitaLand shares gained as much as 3.4 percent to their highest since late January last year.

Hongkong Land and CapitaLand have significant exposure to the Chinese property market.

"One reason is the China portfolio is looking good. Li Keqiang keeps talking about rural urbanisation, sending China properties stocks soaring," said a trader.

Chinese Vice Premier Li Keqiang said urbanisation will drive most of the country's development in the next decade, the local media reported last week, boosting Chinese property, railway and other infrastructure-related stocks.

The pace of activity in China's manufacturing sector quickened for the first time in 13 months in November, a survey of private factory managers found, adding to evidence that the economy is reviving after seven quarters of slowing growth.

1335 (0535 GMT)

(Reporting by Eveline Danubrata in Singapore; Editing by G.Ram Mohan;


STOCKS NEWS SINGAPORE-China Minzhong up after funds, investors buy 10.3 pct stake

Shares of China Minzhong Food Corp Ltd jumped after it said institutional funds and high net worth investors had bought a 10.3 percent stake in the food processing firm from Olympus Capital Holdings Asia at a placement price of S$0.80 per share.

China Minzhong shares rose as much as 6.7 percent to S$0.80 after a trading halt was lifted on Friday. Nearly 14 million shares were traded, 1.8 times the average full-day volume over the past 30 days.

But even after the rise, the stock was still down nearly 2 percent so far this year, lagging the 25 percent gain in the FT ST Small Cap Index.

China Minzhong shares had plunged almost 12 percent on Thursday after a block trade fuelled speculation that one of its largest shareholders had sold its stake.

Olympus, a private equity fund, had invested in China Minzhong since 2006, the company said in a statement on Friday.

"However, given the closed end nature of private equity funds, it is a natural progression for private equity firms to liquidate their investments post IPO and return capital to their investors," China Minzhong said.

1224 (0424 GMT)

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