Supply chain: DMG has sector report. House prefer supply chain managers with greater exposure to less price-volatile agriculture products, Olam is best pick. Note that supply chain mgt sector has good growth prospects and attractive valuations, prefer players that are more exposed to agriculture products, whose prices have historically been less volatile than that for industrial commodities.
Noble is also a BUY, on the back of forecast 47% core FY11 earnings growth, as well as its large exposure to agriculture (FY10 47%, FY11F 39% gross profit contribution). Neutral on Glencore, see little share price upside as macro environment may not be favourable to those with a significant portion of earnings coming from upstream mines.
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