Don't count Olam out just yet
The low-price commodities environment provides rich pickings for mainboard-listed companies, to buy core assets on the cheap, as they seek longer-term returns
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THE year 2014, which saw key commodities such as palm oil, sugar and cotton plunge to five-year lows, has come and gone. Yet, analysts continue to "underweight" the sector, expecting few positive catalysts in the near to medium-term.
Still, it may be premature to throw the baby out with the bath water. The low-price environment provides rich pickings for mainboard-listed commodity companies, such as Olam International, to buy core assets on the cheap, as they seek longer-term returns.
Olam last month broke its year-long streak of divesting non-core assets, buying instead US peanut sheller McCleskey Mills for US$176 million and Archer Daniels Midland's cocoa business for US$1.3 billion.
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