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
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
"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)