Fondsfinans rates "buy" on Norwegian REC

Mon. October 26, 2009; Posted: 12:51 PM

LOS ANGELES, CA-, Oct 26, 2009 (M2 PRESSWIRE via COMTEX) -- ERGY | Quote | Chart | News | PowerRating -- 26 October 2009 - Fondsfinans told local daily Dagens Naeringsliv (DN) on Monday it considers that the flow of negative news could be close to an end and deems that Norwegian solar group Renewable Energy Corporation ASA (OSL: REC), or REC, is a good "buy" option.

The share price target was set at NOK62.

Signals from the new German government for a "positive surprise" to the solar industry have spurred hope for better times for REC, DN said.

Germany is the world's biggest market for solar-cell panels.

The proposal from the new coalition government is very positive for REC and the solar sector, Fondsfinans analyst Hakon Levy told DN.

"Ahead of the coalition negotiations, there was a fear for big cuts in the subsidies from January 2010," Levy said, adding that therefore it has been a positive surprise that the government has now backed an increased emphasis on raising the share of renewable energy and reducing subsidies gradually and in consultations with the solar industry.

REC is due to release its report for the third quarter on 27 October 2009.

"The biggest concern currently is the adjustment of wafer contracts. The uncertainty around that matter is considerable because REC has been restrained with quantifying the effects of reduced prices and potential delayed volumes," Levy said, expecting this to be an important issue at the interim report presentation tomorrow, as well as with the big expansion projects in Singapore and Moses Lake in the USA.

The share in REC closed at NOK42.26, up 1.22%, on Monday on the Oslo Stock Exchange.

(EUR1 = NOK8.3)

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