' Chemoil - Oil price is not the only thing that's up. Chemoil, a global supplier of marine fuel products globally has seen a year-to-date gain of 111.4%. Last Friday, the share price ended 17.7% higher.

' What's driving the interest in Chemoil? 1) A turnaround in earnings with 4Q11 net profit of US$19.5m versus 4Q10's loss of US$1.8m. FY11 net profit was US$46.3m versus a loss of US$9.5m in FY10. 2) Bloomberg data shows that Glencore now owns 89.04% of the Company after buying over Itochu's 37.5% stake. Glencore's last general offer price was US$0.3352 which priced Chemoil at a historical P/BV of 1.544x then. Translating that into a possible transaction price could mean US$0.412 (1.544 x FY11 BVPS of US$0.267).

' Historical valuations in line. Looking at Bloomberg data, Chemoil's historical valuations appear to be in line with peers. But the gain in the share price suggests that the market believes Glencore is pining to take Chemoil private. So, will Glencore take its time or as Nike says 'Just do it'- it's just another 0.96%.


' Technically, the stock broke out above its key resistance zone of S$0.31-0.365 last week. Strong rising volume suggests that the breakout is genuine and is likely to take prices higher. However, the breakout has taken its indicators into overbought levels, which might prompt some investors to take profits. Nevertheless, the trend is still up, targeting S$0.515 and possibly even S$0.585.

Source : CIMB Investment research