Straits Asia Resources: Recent appreciation calls for caution

We are advocating caution in view of Straits Asia Resources’ (SAR) sharp appreciation since our upgrade a month ago. In our opinion, the group’s robust medium term prospects appear to be factored in at current levels. We are cautious on its near term outlook due to: (i) potential write-offs in 4Q09 as a result of losses arising from the Jembayan infrastructure collapse, (ii) lack of forward pricing visibility from FY10 onwards, and (iii) potentially lower production as a result of wet weather in 4Q09. These may take a toll on its near term performance. Nevertheless, its medium term outlook remains intact, backed by tightening energy markets. We have raised our ASP assumptions from FY10 onwards, lifting our fair value estimate to S$2.11 (from S$2.07). We downgrade the stock to HOLD in view of its recent appreciation and suggest re-entry at S$1.90 and below.  (Lee Wen Ching)

Not much leg to go further, stochastic is reversing and it has reach peak again, may go up little but I wont take the risk to hold on, am getting out and come back later. People few weeks ago was talking about collaspe coal barge loader, worry like hell and sell, now that piece of news seems to have been forgotten and buy like mad, such is the behaviour of short memory then no need to see chart, just anyhow whack...can la...anywaythis is no different from casino...