Friday 29 Mar 2024
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KUALA LUMPUR (March 5): RHB Research has downgraded SapuraKencana Petroleum Bhd to “Sell” (from Neutral) at RM2.64 with an unchanged target price of RM2.20 and said it sees increasing risks on counterparty, orderbook replenishment and exploration & production (E&P) assets.

In a note today, the research house said weaker E&P earnings and asset impairment possibilities could arise in the earning quarters.

It said latest foreign shareholding fell to 20% (from 23%, ex-Seadrill) and Tan Sri Mokhzani Mahathir’s resignation from the board could provide uncertainties on Kencana Capital’s holdings (more than 10%).

“Our FY16F/FY17F earnings are lowered by 6-7% as we value upstream at an 8% discount to our oil price assumption (pending the gas sales agreements),” it said.

At 9.41am, the stock fell 6.82% or 18 sen to RM2.46 with 16.76 million shares done.

 

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