Shares of Olam International Ltd rose for the second straight session, helped by an increased risk appetite for commodity stocks in a bullish market and a shot of confidence from Singapore state investor Temasek Holdings.
Shares in the commodity firm rose as much as 4.6 percent to S$1.72 and traded just below the level before Muddy Waters launched an attack on Nov. 19 on its prospects and accounting practices. The stock had fallen as much as 22 percent since the allegations.
Last week, Olam said Temasek had raised its stake in the company to 19 percent from around 16 percent before the Muddy Waters attack. Temasek is backing Olam's $1.2 billion bonds-with-warrants issue.
"We deem the move by Temasek as a potential confidence booster in the near-term. However, we continue to believe that there are still several medium- to long-term issues that need addressing," OCBC Investment Research said in a report.
In a statement on Wednesday, Olam said its net debt to equity before fair value adjustment stood at 1.81 times as of June 30, the lowest level since its listing in 2005. It said its board is "comfortable" with its current equity levels and gearing.
OCBC expects markets to watch Olam's acquisitions with greater scrutiny, especially those into non-related industries, as well as the execution of past acquisitions. It maintained its 'hold' rating and S$1.44 target price on Olam stock.
1326 (0526 GMT)