KUALA LUMPUR (Oct 9): AffinHwang Capital Research has downgraded Sime Darby Bhd to “Sell”(from Hold) at RM8.76 with an unchanged target price of RM7.59 and said Sime had decided to maintain its credit rating.

In a note today, the research house said that to do so, however, Sime would need to reduce gross gearing to the ideal level of 40%, which may require an equity issue.

“The crude pall oil price is firmer, and NBPOL should significantly boost FFB production. But challenges to core businesses remain.

“We maintain our forecasts and target price, but after the recent share-price rebound we downgrade to Sell from Hold,” it said.