SHORT-seller Muddy Waters is keeping its "strong sell" rating on Olam, despite the commodities trader reporting a better set of financial results in its latest quarter.

Muddy Waters, headed by Mr Carson Block, said the firm's borrowings had increased in the three months to 31 Dec, adding that its debt numbers are "dangerously high".

Olam reported a stronger than expected rise in net profit of 21 per cent, on the back of higher revenues.

But the healthier set of numbers did not impress Muddy Waters, which continued to attack the company's choice of acquisitions.

It noted that the company did start a review of its acquisitions strategy: "One of the bright spots for Olam investors is that the company appears to be trying to rein in its capex and acquisition spending."

But Muddy Waters questioned the company's acquisition of coffee maker Seda Solubles, saying that its previous owners had been accused of questionable practices.

Olam shares rose 0.6 percent to $1.645 in early morning trading.