Olam is down 2.1% at $1.65, remaining under the weather since short-seller Carson Block and his research firm Muddy Waters LLC put it in the crosshairs, with its expected comprehensive report still a no-show.
Olam has initiated legal action in Singapore against Block and Muddy Waters for alleged "libel and slander" for statements which caused its stock to plunge earlier this week. Muddy Waters' PR firm said Block and his firm are ready to "vigorously" defend their views.
"There still will be some downward share price overhang on the stock, given the Muddy Waters report is not out" and there's no "clear cut" resolution to the lawsuit, says James Koh, an analyst at Maybank-Kim Eng.
He attributes the huge rebound earlier this week to short covering. He says it isn't certain investors selling their shares will switch to other sector plays. "The overall sector isn't doing that well," he says, noting investors were spooked by Noble's vice chairman emeritus selling a substantial stake, while Wilmar's results have been weak this year.
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