MIDF maintains positive stance on O&G sector

Source From (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/20120704144514/Article/index_html

Published: Monday July 04, 2012

MIDF Research has maintained its positive stance on the oil and gas sector (O&G) on expectation that contract flows will pick up soon, especially the bigger ticket items.

MIDF said it was still placing its hope on the US$100 billion half-decade capital expenditure committed by Petroliam Nasional Bhd and works for the North Malay Basin.

"In addition, we can look forward to the third risk service contract to be dished out soon," it said in a research note today.

MIDF said Dialog Group Bhd remained its pick with a target price of RM2.80.

"We like Dialog on its strong double-digit earnings compounded annual growth rate of 26 per cent. We also like its management's confident on the growth story of its centralised tankage facilities business in Pengerang capitalising on the Refinery and Petrochemical Integrated Development project," it said.

MIDF has also revised its 2012 full-year average oil price projection of US$100 per barrel downwards to US$90.

It said the US Energy Information Administration has also revised its average oil price downwards to US$95 per barrel over the second half of this year.

MIDF said the oil prices would remain flattish throughout next year.

"Among the many causes are the eurozone debt crisis, dampening in the Chinese economy, demand outweighing supply and unrest with the US-lead sanction on Iran," it said. -- BERNAMA