Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-Wilmar faces margin squeeze after China move-CIMB

Reuters: Hot Stocks Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

STOCKS NEWS SINGAPORE-Wilmar faces margin squeeze after China move-CIMB Jul 30th 2012, 04:28 Mon Jul 30, 2012 12:28am EDT CIMB Research said Wilmar's consumer products unit in China may see a margin squeeze after the government asked producers to avoid raising edible oil prices "unless it is absolutely necessary", although there is no control on cooking oil prices. "This news could trigger near-term selling pressure on the stock. Given its underperformance relative to the market, we believe that this news has been more than priced in. But we do not advise additional exposure to the stock," CIMB said. It estimates that China's move could drain 3 percent from the group's 2012 fiscal year earnings if edible oil prices trend higher. Wilmar will report its second-quarter result on Aug. 14. Wilmar shares were down 0.3 percent at S$3.27 on Monday after falling 8.4 percent l ast week. The stock has dropped more than 34 percent so far this year versus the 14 percent gain in the Straits Times Index, making it the worst performing stock on the index. Wilmar is the largest producer of consumer pack cooking oil in China with around 50 percent market share, CIMB said. The consumer products division made up 4.5 percent of the group's 2011 fiscal year pre-tax profit, it added. Citigroup said investors have feared that Wilmar's weakness in oilseeds in the last two quarters will extend into the second half of 2012 and the consumer division will be weaker than expected, but the impact may be better managed in this cycle than in 2008. China's inflationary pressure is currently lower versus the 2008-levels and authorities have historically allowed for price increases as China relies on imports for soybeans and has to pay international prices for these imports, Citi said. Wilmar's valuations are attractive, Citi said, adding that it believes earnings should show some recovery in the second half versus the previous six months as the industry will likely not continue to grow crush volumes if losses continue to widen. For a related story, click 1212 (0412 GMT) (Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com) *********************************************************** 10:38 STOCKS NEWS SINGAPORE-OCBC cuts SGX target to S$6.80, keeps hold OCBC Investment Research lowered its target price on shares of Singapore Exchange Ltd (SGX) to S$6.80 from S$7.00 and maintained its hold rating to take into account a more cautious environment for the bourse operator. SGX shares were up 0.3 percent at S$6.67 and have risen nearly 9 percent so far this year. Last week, SGX reported a 23 percent drop in quarterly profit, hurt by a fall in securities income as volumes declined on global economic uncertainties. SGX has recently announced new initiatives such as higher admission criteria for mainboard listing, revised bid-ask spreads, enhancing exchange traded fund products as well as emphasis on retail investor education and participation, OCBC noted. "While there are more initiatives ahead, global market conditions remain weak and this will mean that most of these measures will not lead to immediate results," OCBC said. "We are expecting the outlook for global equity markets to remain fairly muted, and this will continue to be a drag on SGX's performance, and it has also been shown with the recent delay in some IPOs due to lower valuations." 1029 (0229 GMT) (Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions