KUALA LUMPUR (Aug 20): Kenanga IB Research has initiated coverage on Velesto Energy Bhd with an “Outperform” rating and target price of 35 sen, on its expected turnaround underpinned by improving utilisation and charter rates outlook.

In a note today, the research house said that in addition, further impairment is also unlikely.

“Velesto being the single largest jack-up drilling rig provider in the country with almost non-existent local competition is well-positioned as the prime proxy for increased drilling activities from Petronas,” it said.