SINGAPORE, Jan 26 - Shares of Singapore's GMG Global rose as much as 8.8 percent on Wednesday after Merrill Lynch initiated coverage of the firm with a "buy" rating with a target price of S$0.50.
At 0254 GMT, shares of GMG Global, which owns rubber plantations in Indonesia, Cameroon and Ivory Coast, were 5.3 percent higher at S$0.30 with over 65.9 million shares changing hands.
Merrill Lynch said GMG's parent Sinochem, being China's largest rubber trader, will give GMG direct access to the China market, which consumes a third of the world's rubber production.
"The rubber sector is facing a severe supply shortfall post many years of underinvestment. With the rising demand driven by China and India auto, we expect the rubber price rally to last till 2012," the brokerage said in a report.
The rise in GMG's share price comes as Thailand's Sri Trang Agro cancelled its Singapore secondary listing, citing market volatility.
At 0254 GMT, shares of GMG Global, which owns rubber plantations in Indonesia, Cameroon and Ivory Coast, were 5.3 percent higher at S$0.30 with over 65.9 million shares changing hands.
Merrill Lynch said GMG's parent Sinochem, being China's largest rubber trader, will give GMG direct access to the China market, which consumes a third of the world's rubber production.
"The rubber sector is facing a severe supply shortfall post many years of underinvestment. With the rising demand driven by China and India auto, we expect the rubber price rally to last till 2012," the brokerage said in a report.
The rise in GMG's share price comes as Thailand's Sri Trang Agro cancelled its Singapore secondary listing, citing market volatility.
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