SG Market: Spore shares may see a technical rebound as many stocks are in grossly oversold territory with the STI remaining trapped between the 3110-3150 symmetrical triangle range. Wilmar may get a lift after the Chinese govt scraps price controls on cooking oil.
Wilmar: Newswires report that China has suspended regular rapeseed oil auctions and lifted a 7-month price cap on retail vegetable oil prices, a possible signal that supplies may be ample enough to ease food inflation worries.
CIMB notes that if true, the removal is a nice surprise and could boost the profitability of Wilmar’s consumer products division in 2H11, now that the co is able to raise the retail prices of its packaged cooking oils and pass on higher feedstock costs...
Estimates that for every US$10/tonne increase in pretax margins for the consumer products division, Wilmar’s profit could gain by 1% or ~US$15m.
Keeps earnings forecast and $6.20 TP unchanged for now, reiterates Outperform.
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