RHB Bank Singapore is keeping a " neutral" call on Wilmar international with a lower target price of $2.80 from $3.00 previously. The firm has an ESG score of 3.3 out of 4 and roll forward valuation target to FY2026.

 

The Singapore research group says: " We expect 2026 to be a more balanced year fundamentally, with lower y-o-y crude palm oil (CPO) prices, but geopolitical risks will translate to more volatility. We lower our CPO, but raise our palm kernel (PK) price assumptions for FY2025-FY2027."

 

" With the corruption case hanging over its head, along with tariff uncertainties, volatile raw material prices and economic uncertainties, Wilmar International&rsquo s valuation could remain lower than that of its China-listed peers until earnings undergo a significant turnaround," adds RHB.

 

Thus far, RHB notes that spot CPO prices have moderated from RM4,600-RM4,800/tonne in 1Q2025 to a low of RM3,780 in May, only to bounce back to RM3,900-RM4,100 currently. The decline was mainly driven by geopolitics in the light of US trade tariffs, wars and crude oil prices falling as a result, all of which pushed CPO prices in the same direction.

 

Wilmar International, the Singapore-based food company, plans to boost its palm oil business in Nigeria wooed by policies that have helped stabilise the naira and bolstered the availability of dollars in Africa&rsquo s most populous nation.

 

The company, led by billionaire Kuok Khoon Hong, last week announced a plan to acquire all the shares in a palm oil venture with PZ Cussons for US$70 million ($90.4 million).

 

Wilmar also acquired 8,500ha of old rubber plantations to grow crop that will produce edible oil, according to Santosh Pillai, CEO of Wilmar&rsquo s African unit.

 

The investment shows confidence that the steps President Bola Tinubu has taken to revive economic growth and improve government finances may be working.

 

Nigerian foreign exchange reserves have increased, inflation has moderated and the naira has stabilised.

 

In May, Moody&rsquo s Corp upgraded the country&rsquo s foreign currency debt rating.

 

&ldquo The landscape is beginning to shift,&rdquo Pillai said in an email response. &ldquo Policy changes, particularly greater stability in the naira and improved access to foreign exchange &mdash are creating a more viable environment for long-term investment. Wilmar remains committed to driving sustainable growth in Nigeria&rsquo s palm oil sector.&rdquo

 

Wilmar is growing its palm oil plantations in Nigeria&rsquo s Cross River state as it focuses on supplying the local market with the edible oil that&rsquo s used to cook everything from jollof rice to yam porridge.

 

The West African nation &mdash with a population of more than 200 million &mdash has a palm oil supply gap of 1.25 million tonnes annually, according to the Central Bank of Nigeria, which in 2019 introduced a financing program to increase production by farmers and boost economic diversification.

 

Still, Nigeria has struggled to boost output while rivals including Thailand and Colombia have seen production jump.

 

The African nation has also been trying to solve farmer-herder clashes in its main food-growing regions and Islamist extremists in the northeast seem to be making a comeback.

 

&ldquo A significant portion of Nigeria&rsquo s palm oil production still comes from small-holder farmers,&rdquo Pillai said. &ldquo Many of these plantations are over 25 tio 30 years old, and yields are steadily declining. If these older plantations are replanted with high-yielding seedlings&rdquo Nigeria could increase its oil palm production even faster, he said.

 

For years, Nigeria&rsquo s struggle with an acute dollar shortage deterred investors, with the central bank rationing the greenback to businesses even as international companies including GSK, Bayer and Sanofi shrank their operations in the country or left altogether.

 

Tinubu&rsquo s move to devalue the currency and allow it trade more freely, scrap fuel subsidies and boost revenue are now helping to brighten the outlook.

 

Moody&rsquo s raised its credit rating for the nation to B3, six notches below investment grade, from Caa1, and changed the outlook to stable.

 

 

SINGAPORE &ndash Shares of Wilmar Group&rsquo s Singapore-listed entity Wilmar International fell some 3 per cent last week after the Indonesian authorities seized 11.8 trillion rupiah (S$925.2 million) from the group in a palm oil graft case.

 

The stock slipped below $3 for the first time since March 2020, closing on June 20 at $2.92.

 

Indonesia&rsquo s Attorney-General&rsquo s Office said on June 17 that the seizure was part of efforts to recover state losses from corruption tied to the issuance of palm oil export permits in 2022.

 

This comes as the Indonesian authorities are appealing against a court ruling that had cleared Wilmar and two other palm oil companies, which they accuse of paying bribes to obtain such export permits.

 

Wilmar said the money would be returned if Indonesia&rsquo s Supreme Court cleared the company of wrongdoing in the ongoing case, but would be forfeited in part or in full if the court ruled against it.

 

Shares of Singtel fell 2.28 per cent last week, closing at $3.86 on June 20.

 

Its Australia subsidiary Optus Mobile said on June 18 that it had reached a settlement with the Australian Competition and Consumer Commission, after the competition watchdog in October 2024 filed court proceedings against Optus over allegations of sales misconduct.

 

The settlement includes a proposed A$100 million (S$83 million) penalty, subject to approval by the Federal Court, as well as an enforceable undertaking requiring Optus to address the misconduct. These include making changes to its retail processes, systems and sales incentives.

 

Optus added that it has apologised to affected customers and is providing them with remediation.

 

Stocks react to escalating Israel-Iran conflict

Several Singapore Exchange (SGX) stocks saw increased volatility last week amid escalating tensions between Israel and Iran, which also pushed crude oil prices higher.

 

Shares of jet fuel trader China Aviation Oil closed 4.8 per cent higher at 88 cents on June 20.

 

Crude oil and jet fuel are directly related because jet fuel is refined from crude oil.

 

While rising oil prices can pressure fuel consumers, traders like China Aviation Oil tend to gain from wider margins and trading opportunities.

 

In contrast, shares of Singapore Airlines, for which jet fuel is the largest operating cost, declined, falling over 1.7 per cent during the week to close at $6.79 on June 20.

 

SGX-listed oil and gas companies rose, with Rex International up 4.8 per cent through the week to close on June 20 at 22 cents, while RH PetroGas inched 0.5 per cent higher to close at 20 cents.

 

Offshore and marine stocks gained, too.

 

Mermaid Maritime rose 3.6 per cent to 11 cents, Marco Polo Marine added 2.2 per cent to 4.6 cents and Seatrium inched 0.5 per cent higher to $2.06.

 

Shares of Fu Yu Corp fell more than 5 per cent last week, closing at nine cents on June 20.

 

All independent directors of the components manufacturer resigned, leaving the company&rsquo s chief executive as the sole remaining board member, according to SGX filings released on June 15.

 

Independent directors Royston Tan and Christopher Huang resigned on June 11 following persistent attempts by former director of strategy Victor Lim to remove them from the board.

 

Mr Lim is also the group&rsquo s largest shareholder, holding some 29.5 per cent of Fu Yu shares as at Jan 9. He has been calling for Mr Tan and Mr Huang&rsquo s resignations since January, citing the need for a &ldquo strategic reset&rdquo of Fu Yu due to poor performance and falling shareholder value.

 

Independent director Daniel Poh also resigned on June 11, citing differences in opinion over Fu Yu&rsquo s direction on matters unrelated to the company&rsquo s day-to-day business. Mr Tan and Mr Huang also gave the same reason for resigning.

 

In an update to shareholders on June 17, group CEO David Seow said that the company is actively seeking to appoint new independent directors to the board and has reached out to the Singapore Institute of Directors to invite suitable candidates to apply.

 

SGX listing rules require at least one-third of the board to be independent and that the group has at least two independent non-executive directors.

 

In a June 20 filing lodged on the SGX after the market closed, Fu Yu said four proposed directors have been assessed by an independent party, with no findings made against their suitability for the role.

 

Earlier on June 20, in response to questions from the Securities Investors Association (Singapore), or Sias, Fu Yu noted that its &ldquo day-to-day operations and decision-making processes remain unaffected&rdquo by the resignation of all its independent directors.

 

The update comes ahead of Fu Yu&rsquo s annual general meeting on June 27.

 

Other market movers

Thakral Corp declined some 4 per cent last week, closing at $1.42 on June 20, even as an initial public offering (IPO) by its associate GemLife is expected to significantly uplift the group&rsquo s financial position and unlock growth opportunities.

 

Thakral announced on June 17 the IPO of GemLife Communities, an Australian over-50s lifestyle resort operator, to raise up to A$750 million at an implied post-money valuation of A$1.58 billion.

 

The stapled securities are expected to be listed and quoted on the Australian Securities Exchange upon successful closing of the IPO on July 3.

 

Thakral, which holds a 31.7 per cent stake in GemLife, intends to subscribe to additional stapled securities via the IPO.

 

Post-dilution, Thakral&rsquo s effective interest in GemLife will be about 16.8 per cent, the company said.

 

CNMC Goldmine fell 6.52 per cent last week after gold prices tumbled following the US Federal Reserve&rsquo s decision to keep interest rates unchanged at 4.25 per cent to 4.5 per cent.

 

The stock closed at 43 cents on June 20 as the US Fed forecast higher inflation from US tariffs and cooler growth in 2025.

 

Thai Beverage saw strong trading volumes throughout the week, when its stock slid some 3 per cent to close at 44 cents on June 20.

 

The beverage-maker reported in May that net profit declined 9.2 per cent year on year to 17.8 billion Thai baht (S$699 million) in the first half of 2025.

 

In an annual information meeting for shareholders in Singapore on June 20, Thai Beverage said its spirits business&rsquo net profit fell due to lower sales and higher raw material costs.

 

Net profit for its non-alcoholic beverage and food businesses also declined.

 

However, its beer business delivered an increase in net profit, thanks to strong sales and favourable raw material costs.

 

What to look out for this week

Watch out for further market volatility as the conflict in the Middle East continues to unfold.

 

Over the weekend, US President Donald Trump said the US completed strikes on three nuclear sites in Iran, prompting a fresh barrage of missiles from Iran towards Israel.

 

Additionally, keep an eye out for Singapore&rsquo s consumer price index and manufacturing output for May, which are a key gauge of inflation and industrial momentum amid ongoing tariff uncertainties.

The case also shows the challenges multinational companies face in maintaining governance and ethical standards across jurisdictions

 

[JAKARTA] The Indonesian authorities&rsquo seizure of 11.8 trillion rupiah (S$928 million) from agri-giant Wilmar Group is not only the country&rsquo s largest asset confiscation, but also unprecedented for the company voluntarily handing the amount over in cash &ndash a move legal experts say enables prosecutors to sidestep the complexities of liquidating seized property.

 

The move throws a spotlight on Jakarta&rsquo s stepped-up efforts to root out graft in the palm oil sector, following allegations of misconduct during a severe shortage of cooking oil in late 2021 to early 2022, which exposed governance lapses in one of Indonesia&rsquo s most vital industries.

 

Harli Siregar, the spokesperson for the Attorney-General&rsquo s Office (AGO), told The Business Times: &ldquo This was the largest seizure of funds in the history of ongoing cases.&rdquo

 

The sum, representing nearly two-thirds of Wilmar&rsquo s net income last year, was handed over at the authorities&rsquo request as a gesture of the company&rsquo s &ldquo good faith and innocence&rdquo in the ongoing case.

 

Abdul Fickar Hadjar, a criminal law specialist at Trisakti University, said the confiscated funds could strengthen the prosecution&rsquo s appeal against the ruling by a lower court in March, which had acquitted Wilmar and two other palm oil companies.

 

He said: &ldquo This makes it easier for prosecutors to present additional evidence in the Supreme Court appeal. Seized assets are typically in the form of valuables like property or goods, which are more difficult to use as evidence because they usually need to be auctioned off first.&rdquo

 

The Wilmar case, still unfolding amid Indonesia&rsquo s broader push to reform its palm oil industry, is now before the country&rsquo s Supreme Court, which will review the lower court&rsquo s judgment on points of law.

 

Palm oil purge

In 2023, Indonesia, the world&rsquo s largest producer and exporter of palm oil, set up a task force to enhance governance in the industry and to boost state revenue.

 

The AGO said it has handed over to the state some 217,000 hectares of palm oil plantation land &ndash assets seized from corruption cases over the last seven years.

 

The last major seizure was made in a high-profile case involving tycoon Surya Darmadi, the owner of the Duta Palma Group, who was convicted of corruption over illegal changes in land use in Riau province between 2003 and 2022. He was sentenced to 15 years in prison.

 

Last September, his appeal was thrown out by the Supreme Court, which upheld the jail sentence. Three months later, the AGO confiscated around five trillion rupiah in cash from the tycoon.

 

Largest haul

At a briefing held at the AGO&rsquo s premises on Tuesday (Jun 17), members of the press were shown towering stacks of 100,000 rupiah banknotes confiscated in the Wilmar case. Observers deemed the striking display as a vivid testament to the scale of the corruption scandal.

 

Siregar said that the funds identified as state losses could be used to support the revitalisation of Indonesia&rsquo s palm oil industry.

 

In its statement, however, Wilmar said the funds were a security deposit ahead of the Supreme Court ruling on the 2022 palm oil export case, in which five Wilmar subsidiaries were accused of misconduct during the cooking oil crunch in the country.

 

The company stated that the deposit would be refunded if the Supreme Court upholds the lower court&rsquo s decision, but may be partially or fully forfeited if the ruling is overturned.

 

Although the lower court had ruled in favour of Wilmar and two other palm oil traders in March, that verdict is now under fire, given the AGO&rsquo s appeal against it, and the controversy that arose from judges having been accused of accepting bribes to rule in favour of the accused.

 

Hadjar from Trisakti University said that while repaying state losses does not negate potential criminal liability, Wilmar&rsquo s willingness to provide the security deposit could be viewed as a mitigating factor, depending on how the Supreme Court assesses the case.

 

He added that the company&rsquo s move to surrender the funds may help the company manage the potential economic fallout.

 

Sustainability in question

The ongoing corruption case involving Wilmar Group&rsquo s Indonesian units could pose a significant challenge to the company&rsquo s reputation as a global sustainability leader in the palm oil industry.

 

Observers say the case underscores the complex challenges multinational companies face in maintaining consistent governance and ethical standards across different jurisdictions &ndash a crucial concern for investors and stakeholders who are increasingly prioritising sustainability and corporate responsibility.

 

Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the NUS Business School, said Wilmar has long positioned itself at the forefront of sustainable palm oil production.

 

He warned that the case could hurt its reputation, especially among clients in markets such as Europe which are sensitive to environmental, social and governance (ESG) factors, as well as in the increasingly ESG-conscious Asian markets of China and India.

 

&ldquo The case primarily affects the governance aspect, as it involves (allegations of) lapses in business integrity and ethics,&rdquo he said.

 

&ldquo While cooperating with the authorities and returning funds may mitigate the ESG impact, they do not eliminate the underlying concerns about governance weaknesses. Rebuilding the company&rsquo s reputation will be its most critical priority,&rdquo he added.

 

In a statement on Tuesday, Wilmar Group said its five subsidiaries maintain that all their actions were carried out in good faith and without corrupt intent.

It aims to tap food and nutrition business opportunities in Nigeria&rsquo s palm oil sector

 

[SINGAPORE] Wilmar International : F34 -2.66% is buying the remaining stake it does not already own in a Nigeria-incorporated palm oil business from its joint venture partner, British manufacturer PZ Cussons, for US$70 million.

 

Once its acquisition of the 50 per cent equity stake in PZ Wilmar held by the London Stock Exchange-listed company is complete, Wilmar will hold 100 per cent equity in the palm oil business, the group said on Wednesday (Jun 18).

 

This purchase comes as Wilmar intends to invest in the Nigerian palm oil sector, which offers &ldquo significant opportunity&rdquo for growth in the food and nutrition business, given the country&rsquo s strong market demographics with more than 200 million consumers, said the group&rsquo s chairman and chief executive Kuok Khoon Hong.

 

&ldquo We are bullish on the long-term potential of Nigeria&rsquo s palm oil sector, given its large and growing population and suitability for palm cultivation,&rdquo he said.

 

Wilmar intends to continue developing the upstream palm plantation and downstream businesses in Nigeria, he added.

 

The conditional acquisition is slated to complete in the last quarter of 2025, subject to relevant approvals, and will be funded by internal resources.

 

It is not expected to have material impact on the consolidated net tangible assets and earnings per share of Wilmar Group, the parent company of Wilmar International, for the financial year ending Dec 31.

 

The transaction is not expected to have substantive impact on PZ Wilmar&rsquo s people or operations, the group added.

 

PZ Wilmar was established in 2010 as a joint venture between PZ Cussons and Wilmar International, with each holding a 50 per cent stake.

 

It sells edible cooking oils under the brand names Mamador and Devon King&rsquo s and owns minority stakes in two palm oil plantations in the country, which are majority-owned by Wilmar International. 

 

PZ Wilmar&rsquo s name will be changed once the transaction is complete.

 

The group clarified that PZ Cussons&rsquo subsidiary PZ Cussons Nigeria does not hold shares in PZ Wilmar and will not be affected by the transaction.