Shares of Golden Agri-Resources Ltd fell as much
as 5 percent after the Singapore-listed palm oil producer said
it plans to issue $400 million convertible bonds due 2017 at
2.50 percent per annum.
The initial conversion price is S$0.8896 for each new share,
the company said in a stock market filing on Friday. Golden Agri
shares hit an intra-day low of S$0.66, the weakest level since
June 29.
"People who are keen to buy the convertible bonds may be
selling down part of their existing stake because from a risk
point of view, they don't want to overweigh their exposure,"
said Carey Wong, an analyst at OCBC Investment Research.
"Secondly, the outlook for crude palm oil prices is a little
bit more muted in the near term," he added.
Record southeast Asian palm oil stocks could rein in
benchmark Malaysian futures that gained on the back of
U.S. drought crimping soy production and boosting prices of
competing soyoil, a leading industry analyst said.
1052 (0252 GMT)
(Reporting by Eveline Danubrata in Singapore;
eveline.danubrata@thomsonreuters.com)
************************************************************
10:25 STOCKS NEWS SINGAPORE-F&N may rise above S$8.50 after
capital reduction-Nomura
Nomura said shares of Singapore's Fraser and Neave Ltd
, whose shareholders will vote on the sale of Asia
Pacific Breweries to Heineken on Sept. 28,
could rise above S$8.50 after a proposed capital reduction.
F&N shares were up 0.2 percent at S$8.27 on Friday. The
stock has fallen about 2 percent since the Singapore drinks and
property conglomerate announced its plan to cancel one for every
three shares held by all shareholders and pay out S$8.50 for
each cancelled share.
"Assuming shareholders approve the sale of APB and the
capital reduction, we see an arbitrage opportunity since F&N is
offering to acquire one third of its issued shares at S$8.50 per
share," Nomura said.
It added that after the capital reduction, F&N's earnings
per share, dividend per share and revised net asset value will
be enhanced, which should re-rate the share price above S$8.50.
Nomura has a 'buy' rating and a S$9.86 target price on the
stock.
But Nomura said one possible risk is that shareholders may
reject the proposed sale of F&N's nearly 40 percent stake in
APB.
With 80 percent of F&N's earnings expected to come from
property after the capital reduction, investor interest in F&N
may wane unless the management can increase the contribution
from non-property activities over time, Nomura added.
1010 (0210 GMT)
(Reporting by Eveline Danubrata in Singapore;
eveline.danubrata@thomsonreuters.com)
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