Possible to rebound back to above 2.80 level on clarification made by Company. Strong volume seen today on rebound....
Olam (O32.SG) rises 3.1% to S$2.64, recovering some of it's 13% fall this week, with analysts largely debunking concerns sparked by a recent CLSA report talking about Olam's dependency on Nigeria export incentives and perceived accounting discrepancies. RBS says the concerns are "misplaced," and reiterates its Buy call with S$4.05 target. IIFL says "this may well be Nigerian scam at its finest: a disgruntled rival trader spun a tale; a brokerage took the bait and speculated that Olam's business is built on Nigerian export incentives." It adds, Olam's operations are robust and its gearing is within the comfort zone; "we recommend Buy, especially now that it is trading at a cheap 17X forward P/E." Morgan Stanley, which has an Overweight rating says "the issue of export incentives is not significant...and we are not concerned about the impact of a change in incentive structures on Olam's profitability." Credit Suisse, which has a Outperform call and S$4.20 target, says the sharp pullback means Olam shares are now at "an attractive entry point."
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