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Olam Vs Muddy Waters $1.30SGD is the Battleground

The Olam Vs Muddy Waters battle will resume today in Singapore, Olam had a soft day yesterday but still holds the lead.

Most believe the Muddy Waters accusations to be exaggerated, however Olam must put their best foot forward over the coming weeks. The rights issue was a good move, gaining the support of Temasek was a brilliant move but now the company needs to get them selves out knocking on the doors of banks and funds with the hard core facts that disprove Muddy Waters and brings big buyers back to market.

The trading action so far is neutral to positive in Olam’s favor, but they can not rest on that, they must do more to bring in on market buyers by selling the idea that rights offer is a great investment.

Muddy Waters has his publicity machine in full swing and I am sure we will here more noise from his camp in the coming week

Will Olam collapse? No, Temasek is not your regular investment fund Muddy Waters so easily scare, Temasek have wider responsibility, one to the Sovereign Nation of Singapore and it’s people. Temasek could stand to lose 10′s of billions if Olam were to fail and the Singapore Financial Hub, Singapore Stock Exchange left tarnished. It will not happen.

As far as the technicals go on Olam’s chart there is no doubt it is in dangerous territory, but the key number that Muddy Waters will be pushing for is a break below the rights issue price, under $1.30 and Olam will have trouble.

They must draw a line in the sand there and be buyers of what ever comes to market.

Click to see the Chart.