18 May 2012
SapuraKencana SKPETRO stock price plunged 13.8% to RM 1.91 on second day trading due to weak sentiment for the oil and gas counters, Affin IB Research believes Malaysia's Oil and Gas industry is still in a capex upcycle and SapuraKencana is the best proxy to ride the capex upcycle
(SKPETRO closing stock price today (18.5.2012) was RM 1.96)
Shares of SapuraKencana Petroleum Bhd extended its decline for the second day on Friday, falling to a low of RM1.91 earlier, as sentiment for the oil and gas counters was dampened by the weakened markets.
At 3.16pm, it was down 17 sen to RM1.93. There were 39.52 million shares transacted.
Since its debut on Thursday, SapuraKencana, a newly merged entity between SapuraCrest Petroleum and Kencana Petroleum, is down 31 sen or 13.8% from its reference price of RM2.24.
The FBM KLCI fell 15.53 points to 1,528.68. Turnover was 685.37 million shares valued at RM865.07mil. Declining counters beat advancers 725 to 73 while 199 counters were unchanged.
Affin Investment Bank Research had initiated coverage on SapuraKencana Petroleum with a BUY rating and target price of RM2.65, based on 18 times CY13 earnings.
The research house said it liked SapuraKencana for its integrated business model with EPCIC capabilities across O&G value chain; extensive O&G asset base to support business operations and a strong management team with proven project track record.
Other positive factors were a growing global footprint; 16% earnings CAGR over FY12-15E.
It also said the company. with a market cap of RM11.2bil and free float of 44%, it was likely to be included as a FBM KLCI component stock upon its review in end-2012; and importantly, it believes Malaysia's O&G industry is still in a capex upcycle and SapuraKencana is the best proxy to ride the capex upcycle.
Here are two recent posts on SapuraKencane over the past weeks
8 May- Kencana Petroleum awarded fabrication contract worth at least RM 460 million from Murphy Sarawak Oil