Sarin Tech downgraded to "sell" by UOB Kay Hian

UOB Kay Hian said it has downgraded its rating on Israeli-based diamond processing equipment Sarin Technologies Ltd from "buy" to "sell" with a one-year price target of 0.52 sgd per share after the company warned that its second quarter earnings had slipped due to a slowdown in demand for diamonds. "The slowdown currently being experienced is across all products, and the worst hit is India, Sarin's largest market," UOB said in a note to clients. "Management has now highlighted anecdotal evidence we have had that suggests there has been excess inventory built up since Christmas 2005 and Valentine's Day 2006," it said. "It is conceivable that price cuts may be used eventually to clear some of this excess inventory. Meanwhile, demand for Sarin's products will likely remain anaemic. In addition, gross margins are expected to be squeezed in the next few quarters," it added. At 10.45 am, Sarin was down 0.025 sgd or 3.45 pct at 0.70 with 1.09 mln shares traded.