Olam

Olam: Muddy Waters (MW) has just issued a new report on Olam International Limited (Olam), titling its “Not Changing the Old Ways”, which again raised issues over transparency and corporate governance, as well as remaining skeptical if Olam will operate differently in the future. In particular, the viability of the Gabon fertilizer project was called into question, where MW believed that Tata Chemical (TCL) is highly unlikely to participate in the project. OCBC note that in any case, house current forecasts do not include any contributions from Gabon as have always held the conservative view and would only include the project if it has achieved financial close. While house expect the new MW report to weigh slightly on sentiment, maintaining forecasts for now, given that it has already pared its FY14F core net profit figure by 16% recently. Overall, house maintain HOLD with an unchanged $1.45 fair value.