Olam (CIMB)

Olam: CIMB reckons the short term overhang pending the release of short-seller Muddy Waters' research report could present bargain-hunting opportunities. Believes Olam will be able to ride out the storm as Muddy Waters' track record is spotted with hits and misses. CIMB has a Trading Sell call with $1.59 target, premised on near-term uncertainties; but says if the stock drops on its publication, there could be bottom-fishing opportunities. Cautions this could be a risky trade to take advantage of short covering and possibility of share buybacks. Olam's lawsuit against research firm Muddy Waters and its director Carson Block could also be a long-drawn affair. Given a lack of precedents (besides Sino-Forest), it is difficult to gauge Olam's chances of success. But CIMB notes the lawsuit could affect Muddy Waters' decision to publish the report, believed to be 80 pages long. The stock is down 2.4% to $1.645