Commodities

Commodities: the sector was hard hit during the recent market rout. In a “risk on” environment, the reversal in sentiment may lead to a larger than expected rebound. Nomura has a slide pack, reiterates its support for the commodities traders, says “can’t cut out the middlemen”. Recommends Olam (Buy, TP $2.60) as top pick for its operational strength and potential strong growth on the back of active acquisitions. Also likes Noble (Buy, TP $1.50), believes valuation looks compelling at 10x CY12e P/E and 1x CY12e P/B, near floor valuations. For Wilmar (Buy, TP $4.60), believes current valuations provide a very good entry point as the business model, scale and mgt remain solid.