Wednesday, December 1, 2010

AmResearch Overweight on O&G sector

KUALA LUMPUR: AmResearch is maintaining its Overweight on the oil and gas sector with BUY calls on SapuraCrest, Alam Maritim Resources, Kencana Petroleum and Petronas Gas.

The research house said on Wednesday, Dec 1 that it has a HOLD call on Tanjung Offshore and Coastal Contracts due to their unexciting order book outlook.

On Tuesday, the government endorsed Petronas' proposed tax incentives to promote the development of new oil resources, facilitate the exploitation of less accessible oil fields and stimulate domestic explorations.

AmResearch said the beneficiaries of the tax incentives will be providers of engineering, procurement, CONSTRUCTION [], installation and commissioning (EPCIC) services such as Kencana Petroleum and Malaysia Marine & Heavy Engineering Holdings (MMHE).

'Given the re-acceleration in the country's oil & gas capex up-cycle with up to RM10 billion expected to materialise over the next six months, we maintain our OVERWEIGHT view on the sector,' it said.

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