O&G sector to remain positive in 2H17 with improved outlook
KUALA LUMPUR: Maybank IB Research remains positive on Malaysia’s oil and gas sector outlook in anticipating the financial results momentum to pick up in the second half of this year.
The research firm reiterated its view that the sector had bot tomed out and is on a cycl ical recovery, which was ref lected in the withinexpectation second quarter earnings, posted by a majority |of market players under its coverage.
“The oil price hovering at US$ 50 per barrel level and Petronas raising its dividend payment commitment for f inancial year 2017 ( FY17) are some of the key positives pointing towards an improved outlook,” it said in note yesterday.
The state- owned oil and gas company, which reported stronger interim core earnings in the first half of this year, raised its dividend payment commitment to RM16 billion for FY17 to match the FY16 payout.
Maybank IB sa id an accelerated rebalancing of the global crude oil market would spur capital the sector’s expenditure (capex) growth going forward.
It also said the RM60 billion capex commitment by Petronas for this year was positive, with the revival in its upstream activities such as rising drilling works, whi le the pipel ine for tenders is also gradually filling up.
On the company review, Maybank IB said its key “buy” recommendat ions included Dialog, Yinson, Saoura Energy and Wah Seong.
The research house estimated the average oil price for this year to be at US$ 51.80 per barrel. — Bernama