Friday 29 Mar 2024
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KUALA LUMPUR (Aug 28): Sapura Energy Bhd, the top-active stock across Bursa Malaysia so far today, fell as much as 3.5 sen or 9% to its all-time intraday low at 34 sen following an announcement on Sapura Energy's proposed rights issue of new shares.

Analysts said oil and gas (O&G) support services provider Sapura Energy's cash call is seen as book value per share (BVPS) and earnings per share (EPS) dilutive due to an expanded share base.

At 11:22am, the stock was traded at 35 sen with about 212 million shares changing hands. Sapura Energy's all-time intraday low of 34 sen today compares with the stock's record intraday high of RM4.84 on Jan 3, 2014.

Yesterday, Hong Leong Investment Bank Bhd analyst Sean Lim wrote in a report: "Despite the RM4.0 billion recapitalisation exercise [being] essential for Sapura to lower its gearing level for bigger projects to capitalise on improving job market, we reckon share prices to remain under pressure due to its BVPS/EPS dilution amidst unexciting quarterly results."

CIMB Research analyst Raymond Yap said in a note: "We view the capital raising exercise as necessary medicine for SAPE (Sapura Energy) to get back on its feet and be able to take advantage of the nascent upturn in O&G capex spending. Our ex-rights SOP (sum-of-parts)-based target price of 53 sen is already higher than the current share price of 41.5 sen (Friday's closing share price); we advise investors to accumulate now and buy even more on dips to ride the cyclical O&G capex recovery, the Sapura E&P listing and Sapura Drilling tie-up."

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