Olam (CLSA)

Olam: falls 3.0% to $1.61 in strong volume, the worst-performing STI component today. There's nothing specific weighing on the stock, says CIMB; "there's an overhang on the stock arising from the Muddy Waters allegations." The impending release of the research report is a concern as it could throw out new issues. The stock may remain within the $1.545- 1.70 trading range it has held since short-seller Carson Block and his research firm Muddy Waters put it in the cross hairs; Olam has initiated legal action in Singapore against Block and Muddy Waters for alleged "libel and slander" for statements which caused its stock to plunge last week. Muddy Waters' PR firm said Block and his firm are ready to "vigorously" defend their views. Olam, criticized by Muddy Waters LLC for its spending, said it will continue to raise debt to fund expansion as the company defends its reputation against the short seller in its first ever lawsuit. “It could be any pool of debt capital markets that we would tap,” whether bank lending, syndication, bond markets or Islamic finance, CEO Sunny Verghese said, in an interview. “We don’t think it’s in the best interest of our continuing shareholders” to abandon spending plans.That includes committing to investments of $3.2b to $3.7b in FY13-15, against $3.3b spent from 2010-12, the first three years of a six-year program.