Hot Stock KNM rises 10% on RM4.26b Petronas contract

by **Cals** Fri 08 Aug 2014, 03:08

Hot Stock KNM rises 10% on RM4.26b Petronas contract

Business & Markets 2014

Written by Levina Lim of theedgemalaysia.com

Thursday, 07 August 2014 11:02

KUALA LUMPUR (Aug 7): KNM Group Bhd rose as much as 10 sen or about 10% to RM1.14, before paring gains after the process equipment manufacturer said it was a selected subcontractor for a US$1.33 billion (RM4.26 billion) Petroliam Nasional Bhd (Petronas) project.

Shares of KNM was traded at RM1.09 at 10.13am with 19.5 million units changing hands. The stock was the ninth most-active stock on the exchange.

Trading of the stock was halted between 9am and 10am today in conjuction with the announcement.

Investors reacted positively to KNM's announcement that its wholly-owned subsidiary KNM Process System Sdn Bhd was a selected subcontractor to Sinopec Engineering (Group) Co Ltd for the Petronas project.

Sinopec received the letter of award from Petronas subsidiary PRPC Refinery and Cracker Sdn Bhd for the engineering, procurement, construction and commissioning contract involving one package of an oil refining and petrochemical integrated engineering project.

KNM is Hong Leong Investment Bank's top pick in the oil and gas (O&G) sector. This is in anticipation that KNM would capitalise on Petronas' Refinery and Petrochemical Integrated Development (RAPID) in Johor.

In a note, Hong Leong said RAPID was deemed the main theme for the O&G sector in the second half of this year after Petronas approved the final investment decision for the project.

Hong Leong has pinned a target price of RM1.35 on KNM shares.