Olam

Olam: Could see some trading interests as grp together with Dreyfus and Cargill secures permits to export Indian Cotton. India, the largest exporter after the US, halted oversea
sales in Apr to cool local prices and bolster supplies, and then introduced a licensing system for shipments a month later……

Concurrently, cotton soared to its highest price since the commodity began trading in New York 140yrs ago, as demand for imported fiber increased from textile mills in China, the world’s largest user….

UOBKH last week initiated co. at Buy with $3.80 TP based on 18.8x forward P/E. Highlights investors seeking to hedge against falling USD or inflation can consider Olam as co. will benefit from agri-commodity inflation. Tips FY12-FY13 earnings growth of 30%-18%, boosted by profits generated from acquisitions. Says ongoing merger talks with Louis Dreyfus Commodities, if successful, will lead to mutual benefits.