OCBC Investment Research cut its target price for palm oil company Golden Agri-Resources to $0.76 from $0.81 and kept its ‘buy’ rating, citing a larger-than-expected drop in crude palm oil prices.
By 10:28 a.m, Golden Agri shares were down 0.8% to $0.63, and have dropped 11.9% since the start of the year, compared with the Straits Times Index’s 16.2% rise.
OCBC has cut its revenue and earnings forecasts for 2013 by 6.7% each for Golden Agri, as it lowers its crude palm oil price assumption to US$750 ($923)/tonne from US$950/tonne previously.
“Crude palm oil prices have been falling a lot faster than what the market had expected, hit by weaker-than-expected demand from China, leading to rising stockpiles in both Malaysia and Indonesia,” OCBC said in a report.
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