| DJ MARKET TALK:Wilmar Down 0.5%;S/T Performance May Be Capped-UOB | ||
| 12/30/2010 9:25:00 AM |
0125 GMT [Dow Jones] Wilmar (F34.SG) is down 0.5% at S$5.66 after the company announced it's forming a 35:40:25 JV with the China units of Kerry Properties (0683.HK) and Shangri-La Asia (0069.HK) to bid for six sites in Liaoning province again, with a potential total investment of CNY7.5 billion (US$1.1 billion); Wilmar will inject CNY2.63 billion (US$394 million). The sites are designated for residential and commercial purposes with a total gross area of 6.1 million sq ft. UOB KayHian, which has a Buy recommendation and a S$7.10 target on the stock, says its 5.1% fall the day after its first property investment announcement (Dec. 21) "is a clear indication that investors do not like Wilmar's diversification into non-commodity business...(it) could be seen as the start of Wilmar's loss of business focus." The house adds that its short-term performance could be capped by the negative reaction over new property investments and the regulatory risks in China, but it awaits a meeting with the management Jan. 7 for more clarity. Tuesday's low at S$5.56 may support near-term. (matthew.allen@dowjones.com)
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