Wilmar - Briefing calms some property JV fears

Written by Dow Jones & Co, Inc Monday, 10 January 2011 10:28 Share this Wilmar International (F34.SG) is +1.2% at $5.77, outperforming the STI, which is flat-to-lower; the company’s analyst briefing Friday seems to have soothed some fears over a loss of business discipline after its foray into property development. DMG says after the briefing, it is “comforted” that the property JV “will not be detrimental to the company’s business focus”; the property business “will essentially ride on China’s urbanisation and rising wealth, which are the very same factors driving its agribusiness in China.” It adds the stock’s recent decline should have factored in the uncertainty relating to the property venture, and it reiterates its Buy call on Wilmar with an unchanged $7.88 price target. Separately, Morgan Stanley, which has an Overweight call on the company, notes the management stressed that the financial and time commitments to its property ventures was small and would be realised over several years. The resistance is tipped at $5.82, the 30-day moving average.