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Friday, April 12, 2013

Singapore's commodity traders underperform rally


Singapore's shares may have turned risk-on after Wall Street's rally to fresh record highs, but someone forgot to tell the commodity-trader plays, which are underperforming.

While players may have concerns over their upcoming results releases, "the soft earnings have been kind of priced in," says Carey Wong, an analyst at OCBC. But he notes, "increasingly, there's a view the super commodity cycle may be nearing its end and so a pullback is definitely not surprising. It remains to be seen what other measures the governments around the world can come up with to boost economic growth. If Japan really puts money into infrastructure, we may see a pretty rapid recovery in commodities."

But he notes, China doesn't look particularly strong, with authorities looking at "high" rather than "super" growth. While the STI is up 0.4%, Wilmar (F34.SG) is down 0.6% at $3.35 and Noble (N21.SG) is down 0.4% at $1.18.

Olam (O32.SG) is up 0.3% at $1.67, although it could see some short-covering emerge after Wednesday's spike in short selling to 1.02 million shares. Golden Agri (E5H.SG) is flat at $0.57.

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