Hot Stock SapuraKencana rises 8% on upgrades, prospects

Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Monday, 20 May 2013 15:18
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KUALA LUMPUR (May 20): SapuraKENCANA PETROLEUM BHD []
rose to a fresh intraday high after gaining as much as 28 sen or 7.53%
to RM4.
The well-connected oil and gas (O&G) support services provider has
been a favourite among analysts and investors due to its growth
prospects.
At 2.56pm, SapuraLKencana pared gains to RM3.96 with some 16
million shares traded.
Its share price has been steadily rising to create a new all-time high on
a near-daily basis this month.
The biggest climb was on May 6 when it closed 40 sen higher to
RM3.45. This was almost double its issue price of RM2 on the stock's
maiden trading day on May 17, 2012.
The group has been a darling of O&G analysts. Bloomberg data shows
that 14 of the 16 analysts covering SapuraKencana have “buy” calls on
the group.
Some research houses have upgraded SapuraKencana after the latter
completed its acquisition of Seadrill Ltd earlier this month.
Alliance Research Sdn Bhd had last week upgraded its target price (TP)
for SapuraLKencana to RM5.28 from RM3.86 while TA Securities Holdings Bhd raised its TP to RM4.32 from RM4.15.
AmResearch analyst Alex Goh wrote in an O&G sector note today that SapuraKencana is rated a “buy” with a TP of RM4.65.
“In view of the multiple flows of contracts this year, we maintain our "overweight" call on the sector with "buy" calls for
SapuraKencana, ALAM MARITIM RESOURCES BHD [], DIALOG GROUP BHD [] and PETRONAS GAS BHD [],” said Goh
Goh has listed SapuraKencana as one of the “likely bidders” for eight out of the 14 upcoming local upstream and downstream
O&G projects.
Collectively, the projects eyed by SapuraKencana have a total value of RM256.5 billion.