KUALA LUMPUR (May 6): AmInvestment Bank has downgraded MISC Bhd to “Hold” (from Buy) with a lower fair value of RM9.25 (from RM10.30), and said it expects MISC’s 1QFY16 results, which will be released this evening, to be weak given that petroleum spot charter rates have fallen by 35%-46%.

In a note today, the reseach house’s Alex Goh said he had lowered his FY17F-18F earnings for MISC by 4%-6% following a moderation in an increase in tanker rate assumption from an average of 3% to 2%.

“We expect MISC’s 1QFY16 results, which will be released this evening, to be weak given that petroleum spot charter rates have fallen by 35%-46%.

“While most of MISC’s charters are secured on long-term charter rates, we expect these trends to reflect prevailing spot rates given that the tanker demand remains lacklustre.

“With storage facilities currently at near full utilisation, we expect physical movements of crude to remain slow. While tank storage facilities are being constructed in the region, these will only be available in the longer term,” he said.

At 9.40am, MISC dipped 0.12% or 1 sen to RM8.34 with 101,100 shares done.