Thursday, August 4, 2011

MISC top loser, weak freight rates worry

KUALA LUMPUR: Shares of MISC BHD [] fell the most in late afternoon trade on Thursday, Aug 4 on rising concerns that the weak freight rates and volumes could impact the petroleum, chemical and container business.

At 4.11pm, it was down 21 sen to RM7.17'' with 496,600 shares done.

The FBM KLCI was up 1.89 points to 1,546.99. Turnover was 994.66 million shares done valued at RM1.22 billion. There were 364 gainers, 381 losers and 289 stocks unchanged.

RHB Research Institute had in a July 11 research report said the performance of MISC's petroleum, chemical and container liner segments will continue to be capped by the weak freight rates and volumes over the next one to two years.

However, it added that value has emerged with an imminent re-rating of the valuations of MISC's offshore assets on the heels of the IPO of Bumi Armada.

'Operationally, we also expect steady income stream from its LNG division and high growth at its offshore & engineering businesses. Indicative fair value is raised by 17% from RM7.26 to RM8.47 based on 'sum of parts'. Upgrade to Outperform from Underperform,' RHB Research said.

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