Olam share price increase ‘within general market view’: SGX
SINGAPORE -The sharp increase in Olam International’s share price ahead of last week’s buyout offer by a Temasek-led consortium was likely within the general market view of the stock, according to the Singapore Exchange (SGX).
SINGAPORE - The sharp increase in Olam International’s share price ahead of last week’s buyout offer by a Temasek-led consortium was likely within the general market view of the stock, according to the Singapore Exchange (SGX).
In a statement aiming to clarify the possible reasons for the increase, SGX noted that from Feb 3 the commodities giant’s share price increased 34.8 per cent to just under S$2.00, more than peers such as Wilmar International, which rose 11.2 per cent over the same period, and Noble Group, which increased 12.6 per cent. Over those weeks, the Straits Times Index rose 2.3 per cent.
The significant increase in Olam’s price led some market watchers to speculate whether information had leaked about the offer, which was pitched at S$2.23 per share.
In a statement today (March 16), SGX said that while it does not prescribe a view of value or pricing of stocks, it noted that of the 13 analysts who issued reports on Olam in February, seven raised their target price by an average of 10.4 per cent with the highest increase being 21.4 per cent. The 13 analysts had target prices of S$1.50 to S$2.00 for Olam.
In the case of Wilmar, eight analysts raised their target price by an average of 2.6 per cent with the highest increase being 4.8 per cent, SGX pointed out. For Noble, one analyst raised the target price in February.
“Trading in these three stocks were within the price ranges set out in the research reports, suggesting they were trading within the general market view of these stocks with Olam shares reflecting a more positive market view,” the SGX said.
The statement went on to say that SGX takes a serious view of all market misconduct in breach of the Securities and Futures Act, including potential insider trading and manipulation activities.
“We will spare no effort in conducting investigations on possible transgressions and will cooperate with regulatory agencies to enforce the law against offenders,” SGX said.
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