POSITIVE UPTAKE: Going into the second half of the year, ECM Libra expects job flow to increase in frequency as more fields and enhanced oil recovery projects come onstream.
“Bearing this in mind, the key news for the industry include Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) at last announcing its listing plan,” highlighted Bernard Ching, head analyst from ECM Libra through a recent email interview.
“The group will list its enlarged issued and paid-up capital comprising 1.6 billion shares. We believe that MMHE could list at price earnings of 15 times or more, if the listing price is RM2.50.”
The head analyst suggested that the listing proceeds would go into yard optimisation at Pasir Gudang, costing RM2.72 billion and also Turkmenistan.
To facilitate its listing, MMHE would undertake several proposed exercises which include increasing its share capital, a share split, a dividend payout and a bonus issue. The initial public offering involved selling 25.5 per cent of MMHE.
The research analyst underscored other notable jobs including an international gas related job snagged by KNM Group Bhd (KNM) amounting to RM289 million and also Kencana Petroleum Bhd (Kencana) continuing to bag fabrication jobs for its shallow water East Piatu field valued at RM201 million.
Besides that, both Dayang Enterprise Holdings Bhd (Dayang) and Kencana received hook up and commissioning work for shallow water fields while Wah Seong Corporation Bhd (Wah Seong) continued to get smallish jobs such as one worth RM48 million for pipe coating jobs for a Thai development.
In other news, Malaysia was to receive Transocean Ltd’s ‘Deepwater Expedition’ drillship in September and’ ‘Frontier Phoenix’ in November.
The country needs three drill ships between 2010 and 2015 as deepwater areas would account for as much as 40 per cent of oil output in 10 years.
ECM Libra continued to note that production from deepwater fields was expected to account for 30 to 40 per cent of Malaysia’s total oil production by the year 2020. Currently, Malaysia’s oil production stood at around 650,000 barrels per day and gas production at around 5.8 billion cubic feet per day.
India’s Larsen & Toubro Ltd announced that their joint venture (JV) pipelay barge with SapuraCrest Petroleum Bhd (SapuraCrest) was ready for work.
“The announcement allayed fears that there is delivery delay of the vessel because it is contracted to work on the group’s 11 production sharing contract (PSC) umbrella job as well as another job in India come October,” he continued.
Also, SapuraCrest was in the bidding for some RM3 billion in jobs whereby RM1.4 billion were local and the rest in Vietnam, Indonesia and India.
Petra Perdana Bhd (Petra Perdana) said that the coming 12 months would see it consolidating businesses and working hard to increase their utilisation which the research firm estimated at around 65 per cent, which was not sufficient to cover operating lease payments.
KNM appointed former director-general of the Malaysian Industrial Development Authority (Mida) Datuk Karunakaran Ramasamy as independent director effective this week.
Karunakaran, during his service with Mida, was responsible for the promotion and coordination of the development of the manufacturing and services sector in Malaysia which included promoting domestic and foreign investment in Malaysia.
On another note, crude oil futures recovered over July and rose some 9.4 per cent month-on-month concurrently with the weakening of the US dollar, acting as a further driver to prices besides positive sentiments on positive US economic data.
“We, again, continue to be steadfast that oil prices will continue to see volatility in the near term as demand numbers are still choppy in the US as well as Europe. At home, it was a good month for local listed players after a sell down seen over the month of June,” concluded Ching.
The analyst underlined Wah Seong as the biggest gainer with a 10.3 per cent uptake while Dayang was the second, gaining 6.2 per cent.
by Ronnie Teo
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