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Hot stock: Olam jumps by most in 6 years before halting shares from trade
[SINGAPORE] Olam International surged by the most in six years in Singapore before the commodity trading company halted its shares from trade.
Olam, controlled by Singapore's state-investment company, requested the halt pending an announcement, it said on Thursday in a statement without further detail. Spokeswoman Chow Hung Hoeng couldn't immediately be reached for comment.
The company, which began with cashew operations in Nigeria in 1989, has grown into one of the world's top re-sellers of nuts while branching out into coffee, cocoa, rice and cotton. It now grows, processes and trades 44 commodities in 65 countries, and said this month it expects to close its biggest deal to date, a US$1.3 billion acquisition of Archer-Daniels-Midland's cocoa unit by the end of the year.
Olam rose 13 per cent to S$1.91 before the halt, giving it a market value of S$4.7 billion. A close at that price would make it the biggest jump for the group since April 2009. The benchmark Straits Times Index rose two per cent as of 11:50 a.m. local time as stocks rebounded a two-week selloff.
Singapore's Temasek Holdings took a controlling stake in Olam in March 2014 to help the trading company fend off attacks from US short-seller Muddy Waters LLC. The US company led by Carson Block in 2012 questioned the state of Olam's finances and operations, causing the stock to plummet.
Little known to retail consumers, Olam supplies materials to companies including PepsiCo. One in eight chocolate bars eaten globally is made from beans handled by Olam, while the trader produces enough cotton to provide all the world with three pairs of socks each year. The quantity of rice it handles annually could feed all of Africa for a week.
The Bloomberg Commodity Index of 22 raw materials sank to the lowest since 1999 this week on concerns a slowing Chinese economy will exacerbate supply gluts. Raw sugar fell to the lowest since 2008, while palm oil entered a bear market on Wednesday. Rice has dropped 10 per cent in the past year as Arabica coffee slumped 38 per cent and cocoa lost more than three per cent.