Thursday, December 10, 2009

Singapore Stock Summary - 10 Dec 09

Singapore Economy (UPDATE) According to a median forecast in a quarterly survey of economists by the Monetary Authority of Singapore, Singapore's GDP is forecasted to expand 5.5 per cent next year. This will be mainly driven by manufacturing and private consumption. This compares with September forecast of 4.5 per cent growth next year and the government's estimate of between 3 and 5 per cent.

Commodities and Plantations (MAINTAIN OVERWEIGHT) OCBC expects continued Outperformance in 2010 for both commodities and plantations citing the global economic recovery with demand on commodities to rise. They maintain their Overweight on the commodities sector and highlight a Buy on Noble and Wilmar.

Wilmar International (MAINTAIN BUY) OCBC maintains its Buy Call on Wilmar International with fair value rmaining at S$8.23. It cited Wilmar's expressed interest to further invest in Asia with expansion likely to bring about better valuations.

Noble Group Ltd (MAINTAIN BUY) OCBC reiterated Buy rating on Noble and raised their fair value estimate to S$3.73 based on higher earnings projection. They cited that the group has performed consistently through both peaks and troughs of commodity cycles and expect contributions from its recent investments to drive volume growth and increase the group's profit.

Olam International (MAINTAIN BUY) OCBC maintained its Buy on Olam but cautions that key risks still include acquisition risk and poorer than expected performance from acquisition targets. With Temasek as its strategic partner, it should benefit from increased financial flexibility and that should help fuel its inorganic growth.

Golden Agri-Resources Ltd ( BUY) OCBC upgraded GAR to a Buy due to CPO prices that are believed to be well supported due to the potential smaller supply in 2010. The market has also re-rated CPO stocks positively due to the more upbeat outlook. Fair value of S$0.58 estimated for GAR.

Straits Asia Resources (HOLD) OCBC advocated caution on SAR due to its recent sharp appreciation since their upgrade a month ago. They remain cautious on the medium term outlook and suggest re-entry at S$1.09 and below with a fair value estimate of S$2.11 (increased from S$2.07).

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