TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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The Edge
24 November 2013
Shares of commodity firms Noble Group, Olam International and Wilmar International have lagged the broader market over the last three years. But sentiment seems to be turning.
In the last month, the three stocks have significantly outperformed the benchmark Straits Times Index. Shares of Noble are up 8.5%, while Wilmar and Olam are not far behind at 6.3% and 6.2%, respectively. That places them at Nos. 2, 3 and 4 on the list of best month-to-date performers within the index. At No. 1 is Golden Agri-Resources, which, as an oil palm planter, also happens to be in the commodity business.
Is it time for investors to turn bullish on commodity plays again? The most recent quarterly results from Olam, Noble and Wilmar show mixed fortunes for all three companies. At Noble, earnings fell 70% y-o-y to US$22.9 million ($28.6 million).The decline included a non-cash loss related to its stake in coal miner Yancoal Australia. Stripping out the loss. Noble says its earnings would have been US$113 million – the highest since 3Q2010.
Indeed, most analysts actually think the company’s position is improving. Nomura notes that the agricultural business, which includes sugar refining and oilseed processing, has returned to the black after two consecutive quarters of losses. Credit Suisse, meanwhile, highlights that its energy business, which includes electricity distribution and coal investments, reported a 55% improvement in operating income. Nomura has a “buy” call on the stock, while Credit Suisse has an “underperform” rating.
“We believe that Noble is turning the corner slowly, but surely. However, challenges such as infrastructural bottlenecks in Brazil, oilseed crushing overcapacity in China and the longer-than-expected gestation of [the metals, minerals and ores division) could blunt recovery. We expect a slow recovery and believe that the recent increase in share price has factored that in as well,” says CIMB Research, which has a “neutral” call on the stock.
Not everyone is positive on Noble, though.
“Management has done a credible job of delivering cost savings,” says HSBC analyst Thilan Wickramasinghe. “Nevertheless, this is not enough to deliver earnings visibility, given the volatility and bottlenecks the group is experiencing in the agri and metals segments,” he adds. HSBC has downgraded its rating on the stock to “underweight” from “neutral”.
Over at Wilmar, recent quarterly earnings surprised on the upside as the company booked higher contributions across most of its business groups. DBS Vickers analyst Ben Santoso has raised his earnings estimates for 2013 by 12% to account for better yields and margins in a number of businesses, including sugarcane, oilseeds and cooking oil. He has also raised his price target on the stock to $3.83 from $3.53 and upgraded his rating to a “buy” from a “hold”. UOB Kay Hian Research is similarly positive and has raised its target to $4.20 from $3.80, as it notes that lower commodity prices have not stopped Wilmar from delivering a good set of earnings.
Wilmar might also get a boost from Indonesian state oil company Pertamina’s plan to buy three million tonnes of biodiesel in 2014. Wilmar has a large and profitable biodiesel business and has already submitted a tender proposal. Bank of America Merrill Lynch has upgraded the stock to a “buy” and lifted its price target to $5 from $3.90 on the strength of potential biodiesel gains.
Meanwhile, Olam delighted analysts with lower capital expenditure and an improved operating cash flow, though a few analysts were disappointed with the company’s lower earnings and weak revenue growth. As the company undertakes a restructuring of its business, most analysts seem to prefer waiting for a clearer picture to emerge.