Genting Singapore target to $2.45 /Golden Agri leads gains in palm oil firms

CIMB raises Genting Singapore (G13.SG) target to $2.45 from $1.88, reiterates Outperform, says Dow Jones.

 

“Together with a market leadership position, albeit a diminishing one, our estimates imply that Singapore’s overall gaming market could be worth about $6.3 billion-$7.5 billion by 2011-12, which is commendable given the short ramp-up period.”

Makes no changes to FY10-12 earnings projections, but sees potential upside from licensing of junket operators, RWS maintaining current market leadership over longer period.

"We continue to believe that Singapore, with its higher earnings growth prospects, superior EBITDA margins and stable regulatory framework deserves to trade at a premium to the Macau operators."

Adds, given recent sharp price outperformance, there are risks of short-term weakness, especially if quarterly earnings disappoint.

Shares of Singapore-listed palm oil firm Golden Agri-Resources rose 4.4% to $0.60 on Monday, on prospects for higher demand for palm oil amid concerns of a shortage of soy and corn crop in the U.S.

Over 78 million shares had changed hands by 0202 GMT.

The U.S. Department of Agriculture slashed its estimates for soybeans and corn crop by 2% and 4% respectively on Friday, due to warmer weather in August.

“The U.S. report about cutting its corn, soy crop estimates blew expectations. These are all substitutes for palm oil, so investors are turning more bullish and revisiting the sector again,” said a local trader.

Shares of Indofood Agri Resources climbed 3.9% to $2.38, with over 5 million shares changing hands.