Wilmar shares plunge to 3-month low; Singapore index flat
SINGAPORE May 9 (Reuters) - Shares in Wilmar International Ltd plunged to their lowest in more than three months on Friday after the company posted weak earnings, while the Singapore index was flat in the absence of any major market catalyst.
The benchmark Straits Times Index was little changed at 3,249.11, while MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent.
Wilmar shares plunged as much as 6.3 percent to an intra-day low of S$3.13 after the palm oil company on Thursday said its first-quarter net profit slumped 49 percent on losses in the sugar business and negative soybean crushing margins in China, with lower palm refining margins also weighing.
Wilmar shares are trading at their lowest since Feb. 6, with the company topping the list for the most actively-traded stock by value.
Barclays maintained its "overweight" rating on the Wilmar stock with a target price of S$4.10 despite the losses, saying it expected a recovery in the second half of the year to provide future upsides for the company.
"The strong performance in the plantation business and significantly better volumes and margins in the consumer business bode well for a recovery in the second half when the profitable season kicks in for sugar, and crushing margins (hopefully) normalize," the brokerage said in a note on Friday.
Losses in Wilmar were offset by gains in United Overseas Bank Ltd (UOB) and Hongkong Land Ltd, which allowed the index to escape relatively unscathed. Hongkong Land shares edged up 1.7 percent, while UOB shares stretched their gains into a second day to rise 1.9 percent to S$22.4, after hitting a 1-1/2 week high on Thursday.
Among other stocks, shares of Singapore Airlines Ltd dipped 1 percent to a 7-week low after the airline said on Thursday its net operating loss had widened in the fourth-quarter due to persistently weak pricing power and flagged a challenging outlook.
OCBC maintained its "hold" rating on the Singapore Airlines stock but said the target price of S$9.50 was under review pending an analyst briefing. (Reporting by Andrew Toh; Editing by Anupama Dwivedi)
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