SINGAPORE (Aug 16): UOB Kay Hian is maintaining its “sell” recommendation for Wilmar International with a target price of $3.08. This follows its disappointing 2Q results which were hit by abnormal soybean prices.

During the quarter, soybean prices had risen despite substantial global supply as commodity funds were betting on future crop losses arising from the unfavourable weather in Argentina and the La Nina. Since then, soybean prices had corrected by between 15% and 20% from its peak in June.

”Soybean prices weakened in 3Q16, which showed that its view was right, while its timing was wrong,” says UOB in a note on Monday, adding that Wilmar’s management had recovered some of its trading losses in 3Q.

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