Olam +5.6%; May Be Seeing Short Squeeze – Daiwa

0733 GMT [Dow Jones] Olam extends gains, best blue chip performer as announcement of convertible bond buyback continues to support stock; shares +5.6% at S$1.03 vs STI +1.4%; resistance tipped at 30-day moving average of S$1.08. Daiwa says shares may be seeing short squeeze as convertible bond holders who are accepting company’s buyback offer unwind hedges in underlying shares. Broker adds company taking advantage of pricing disconnect between price of convertible bonds and company’s fundamentals. Maintains Buy rating and target price of S$4.01; “we like the company for its business model that hedges away most risks to generate fairly predictable earnings growth of around 25-30% per year, investors may be hard pressed to find companies that can deliver this type of growth in 2009 and 2010.” (KIG)