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04-08-2012, 11:33 AM
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The Straits Times
www.straitstimes.com
Published on Aug 04, 2012
PLAY OF THE WEEK
Wilmar crushed by host of worries
Share price dips 9.5 per cent, wiping out $2.2b in market value
By Goh Eng Yeow Senior correspondent
PLANTATIONS giant Wilmar International has slumped to levels last seen in the aftermath of the global financial crisis three years ago and now there are worries that it may head even lower.
In the past two weeks alone, the former investor darling has nosedived about 9.5 per cent, wiping out about $2.2 billion of its market value. It closed unchanged at $3.24 yesterday.
The latest drop in share price means that Wilmar has fallen by more than one-third in price since the start of the year.
This works out to $11.3 billion in value terms - a sum not to be sneezed at, to say the least, since it is equivalent to the market capitalisation of a property giant such as City Developments.
As it comes under selling pressure, Wilmar's trading volume has also shot up. For the week, about 11.92 million shares changed hands on average a day - 21.8 per cent higher than the average 9.79 million shares changing hands daily so far this year.
The reasons for Wilmar's fall from grace are varied. Investors were initially spooked by the losses it had incurred in its problematic oilseeds and grains division when it reported its first quarter results in May.
This division's losses had also been responsible for previous sell-downs in the counter in November 2010 and again in February last year.
Then in the past week, a fresh stampede out of the stock came after a wire story reported that the China authorities were asking cooking oil suppliers such as Wilmar to hold prices steady to avoid adding to inflation pressures unnecessarily.
Unsurprisingly, some analysts are dour about Wilmar's prospects.
"We think Wilmar's share price may trade lower into the upcoming second quarter results. The tough operating environment has not been fully factored into consensus earnings estimates," said JPMorgan analyst Chan Ying-Jian in a report on Monday.
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The Straits Times
www.straitstimes.com
Published on Aug 04, 2012
PLAY OF THE WEEK
Wilmar crushed by host of worries
Share price dips 9.5 per cent, wiping out $2.2b in market value
By Goh Eng Yeow Senior correspondent
PLANTATIONS giant Wilmar International has slumped to levels last seen in the aftermath of the global financial crisis three years ago and now there are worries that it may head even lower.
In the past two weeks alone, the former investor darling has nosedived about 9.5 per cent, wiping out about $2.2 billion of its market value. It closed unchanged at $3.24 yesterday.
The latest drop in share price means that Wilmar has fallen by more than one-third in price since the start of the year.
This works out to $11.3 billion in value terms - a sum not to be sneezed at, to say the least, since it is equivalent to the market capitalisation of a property giant such as City Developments.
As it comes under selling pressure, Wilmar's trading volume has also shot up. For the week, about 11.92 million shares changed hands on average a day - 21.8 per cent higher than the average 9.79 million shares changing hands daily so far this year.
The reasons for Wilmar's fall from grace are varied. Investors were initially spooked by the losses it had incurred in its problematic oilseeds and grains division when it reported its first quarter results in May.
This division's losses had also been responsible for previous sell-downs in the counter in November 2010 and again in February last year.
Then in the past week, a fresh stampede out of the stock came after a wire story reported that the China authorities were asking cooking oil suppliers such as Wilmar to hold prices steady to avoid adding to inflation pressures unnecessarily.
Unsurprisingly, some analysts are dour about Wilmar's prospects.
"We think Wilmar's share price may trade lower into the upcoming second quarter results. The tough operating environment has not been fully factored into consensus earnings estimates," said JPMorgan analyst Chan Ying-Jian in a report on Monday.
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