Wednesday, September 28, 2011

OSK Research upgrades MSM to Buy from Neutral

KUALA LUMPUR: OSK Research has upgraded MSM Malaysia to a Buy from Neutral after the significant share price retracement.

It said on Wednesday, Sept 28 its fair value for MSM was RM5.24 while the last close was RM4.49.

OSK Research said MSM's share price has lost significant ground of 16.1% over the past two weeks.

'We see this as an opportunity to accumulate given that declining commodity prices, as witnessed now, will bode well for MSM by reducing its raw sugar costs,' it said.

The research house said with sugar consumption fairly inelastic, it expected that demand for MSM's products would remain stable even under a tough economic environment.

'We are thus upgrading MSM to a BUY from NEUTRAL previously after the significant share price retracement. Our FV is revised upwards slightly to RM5.24 as we roll forward our valuation horizon to 13.0 times mid-CY12 PER,' it said.

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