Equity Research Team

AmWatch
13 September 2024

BURSA MALAYSIA FOCUS OF THE DAY

FBM KLCI 1,639.800 -20.55 (-1.24%) OIL & GAS: Sector downgrade on fairly-priced outlook
52-Week Range 1,415.60 - 1,684.68 (NEUTRAL, Downgraded)
Mkt Cap (RM mil) 2,013.78
Daily Volume (‘000 shares) 2,964,141
Balanced scorecard in 1H2024. Companies under our active coverage
Daily Value (RM ‘000) 3,335,415
delivered a fair performance with 50% of companies coming in within
expectations. These included Dialog, MISC and Petronas Gas. Outperformers
for the sector were Bumi Armada mainly due to the revision of operating fees
TOP 5 GAINERS for floating production storage and offloading (FPSO) vessel, Armada
Closing Chg Olombendo, in the previous quarter and Deleum, which is currently seeing the
Price gradual recovery of its oilfield integrated services (OIS) segment. Petronas
(RM) (RM) Chemicals was the only underperformer which was impacted by higher-than-
F&N 29.76 0.24 expected increase in plant operating costs.
HLBANK 21.30 0.20
VS-WC 0.01 0.19 On a sequential basis, sector performance appears to be moderating. We
NIKKEI-HC 0.56 0.16 observe the start of a normalising trend in 2Q2024 as core earnings increased
GCB 2.65 0.11 by only 10%, largely due to the impact of a lower earnings base. During the
period, Deleum continued to be the star performer, driven by a sharp 25%-pts
improvement in operating margins for the OIS segment.

TOP 5 LOSERS Revised Brent crude oil price forecast for 2024F to US$83/barrel (bbl) for 2024F
from US$85/bbl previously and set 2025F at US$80/bbl. We adjust our Brent
Closing Chg crude oil price forecast slightly to account for weaker-than-expected
Price
(RM) (RM)
performance in recent months. We see the current momentum as largely driven
by negative sentiments from concerns over global oil demand dynamics as
NESTLE 102.00 -1.50 China’s economy softens while the transition to electric vehicles create a
ALLIANZ-PA 21.80 -0.80 consumption dent in transport fuel.
PETDAG 19.08 -0.48
MPI 27.20 -0.38 Downgraded sector rating to NEUTRAL from OVERWEIGHT previously. We
KLK 21.16 -0.36 see a more balanced outlook for the sector moving forward due to: (a) lower
earnings growth of 5% for 2025F from 22% in 2024F after a period of easy
comparables; (b) a neutral outlook for the petrochemical sector as commodity-
DIRECT BUSINESS TRANSACTIONS related products continues to be weighed down by overcapacity and weak
Stock Quantity Price Value demand from China, and (c) rising downside risks for local O&G maintenance
(‘000) (RM) (RM’000) contractors due to recent developments surrounding Petronas and Petros.
PBBANK 100000 4.81 481,000
Other report
KAB 16900 0.33 5,577
BWYS 9824.2 0.24 2,358 FBM KLCI ETF (HOLD Maintained; FV: RM1.95) Bursa ETF Watch: More
PESTECH 8000 0.14 1,120 sectors tilted towards neutral
MBSB 7500 0.80 6,000
MYEG 7119.1 0.92 6,514 RETAIL RESEARCH
SPSETIA 6250 1.12 7,000
Stock on Radar: QL RESOURCES
HLBANK 6150 21.30 130,995
CHINHIN 6000 3.06 18,360
ECONOMICS & FX HIGHLIGHTS
HANDAL 5599.65 0.05 280
NCT 4960 0.49 2,430 Daily Market Snapshot
SYSTECH 4300 0.33 1,419

Note: Only transactions of 4mil shares and above are shown

AmWatch 13 September 2024

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