Olam

Olam: StanChart maintains its OUTPERFORM rating on Olam with $1.93 TP, but remove its ACT (Actionable, Conviction, Timely) call on the counter. Industry consolidation appears underway and at 1x current book, house also see considerable value in Olam on a medium-term basis. Olam's investor education programme helped improve knowledge on its operations, but not the positive share price impact that StanChart expected. This was partially due to its weak 4QFY13 earnings and lack of buying by Temasek (24% stake) when the share price fell below $1.60. StanChart now expects that the re-rating process will most likely be a more drawn out affair built around earnings, cash generation and balance sheet management.