Impending subsidiary IPO sends Wilmar soaring – 24 June

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Impending subsidiary IPO sends Wilmar soaring

24 June 2020

Wilmar have announced plans to separately list its China subsidiary on the Shenzhen Stock Exchange, and has started the filing of an updated draft prospectus. Although there is no assurance at present that the Proposed Listing will proceed, as things are still in progress, the development has nonetheless resulted in a surge in share price as hype was generated.

For now, caution ought to be warranted, given that the situation is still fluid and should the listing fail to substantiate, a correction could still occur. While the listing of its subsidiary will be beneficial for its cash flow, focus should still be placed towards its core business.

Consumer demand of its products will still be key, along with the sustainability of its crops. Should its food products, such as rice, flour and cooking oil, continue to see strong growth in the upcoming quarter due to Covid-19 and importance placed toward food security, optimism may follow for Wilmar.

Technical Outlook (Powered by Trading Central):

Wilmar Chart

Wilmar International ST: As long as 3.7 is support, look for 4.39. Our pivot point stands at 3.7

Our Preference: As long as 3.7 is support, look for 4.39

Alternative Scenario: Below 3.7, expect 3.48 and 3.34

Comment: The RSI is above its neutrality area at 50. The MACD is below its signal line and positive. The stock could retrace in the short term. Additionally, the stock is trading above both its 20 and 50 day MA (respectively at 3.86 and 3.57)

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