Singapore Hot Stocks-Golden Agri falls on Deutsche's sell call

SINGAPORE, Oct 17 (Reuters) - Shares in Golden Agri-Resources (GAGR.SI) fell as much as 7.8 percent on Friday on concerns about falling palm oil prices and after Deutsche Bank recommended investors sell the stock.

By 0250 GMT, Golden Agri shares were down 7.3 percent at 19 Singapore cents. Shares of larger rival Wilmar (WLIL.SI), which also engages in downstream activities such as biodiesel and food, slid 1.8 percent.

"We have a cautious near-term outlook for CPO (crude palm oil) prices given excess inventories and supply coming on stream. With CPO prices falling and costs remaining high, we expect the street to cut earnings," Deutsche analyst Pyari Madhava Menon wrote in a report.

Golden Agri "has been aggressive in reporting revaluation gains, which could reverse if CPO prices fall below US$575/ton," the analyst added.

Deutsche rated Indofood Agri (IFAR.SI) and First Resources (FRLD.SI) a "hold" and maintained its "buy" call on Wilmar, saying the latter's downstream businesses would benefit from rising palm oil supply and the current diversion to biodiesel.

Nomura Malaysia on Thursday issued a report that said the current downcycle in crude palm oil prices is expected to last at least another year.

The Straits Times index was down by 0.6 percent. (Reporting by Ramya Jaidev; Editing by Kevin Lim)