Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-CIMB cuts Petra Foods target price

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STOCKS NEWS SINGAPORE-CIMB cuts Petra Foods target price Jul 9th 2012, 01:43 Sun Jul 8, 2012 9:43pm EDT CIMB Research lowered its target price for cocoa company Petra Foods Ltd to S$2.04 from S$2.34 and kept its 'underperform' rating on the stock, citing potentially lower processing margins. Shares of Petra Foods were flat at S$2.46 by 0130 GMT. They have surged 33 percent since the start of the year, compared with the Thomson Reuters Asia Pacific ex Japan Food Processing Index's 2.3 percent rise. "There has been a flurry of downstream investments in Indonesia from domestic and international players following an imposition of export taxes on cocoa beans, aimed at encouraging value-added downstream production," said CIMB in a report. Indonesia's grinding capacity is expected to jump 43 percent in 2012 on new installations, according to the Indonesian Cocoa Industry Association, and CIMB expects capacity to grow another 28 percent to 500,000 metric tonnes by 2013, tipping the industry into oversupply. The new capacity will stiffen competition and erode the margins of processors such as Petra Foods, CIMB said. 0936 (0136 GMT) (Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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