Singapore shares were lower, with palm oil giant Wilmar International among the biggest decliners after J.P. Morgan cut its target price on the stock by 35%, citing a tough outlook due to high soybean costs.
The Straits Times Index was down 0.4% at 3,021.44 points, while MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1%.
Wilmar shares fell as much as 1.8% and were the worst performing stock on the STI so far this year. The stock has been under pressure on concerns about its margins and China’s move to ask producers to avoid raising edible oil prices.
“We believe Wilmar will continue to face crush margin pressure from higher soybean raw material costs in China,” J.P.Morgan said in a report, reducing its target price on the stock to S$2.80 from S$4.30 and keeping its neutral rating.
DBS Vickers recommended locking in profits from small and midcap stocks that have rallied close to their fundamental target prices, such as Raffles Medical Group, Super Group and CDL Hospitality Trusts.
DBS advised investors to take advantage of an eventual pullback to buy stocks with strong and visible catalysts, including Bumitama Agri and Tiger Airways Holdings.
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