October 30, 2012 / 2:11 AM / 5 years ago

STOCKS NEWS MALAYSIA-Hong Leong starts coverage of Perdana Petroleum with an 'overweight'

KUALA LUMPUR, Oct.30 - Hong Leong Investment Bank has initiated coverage of Perdana Petroleum starting the offshore marine services firm with an ‘overweight’ call.

The bank said the firm will benefit from a pick-up in the global and domestic off-shore oil and gas sector.

“We are projecting a drastic swing from a core earnings loss of 28 million ringgit (in 2011) to a core earnings profit of 24 million ringgit and 49 million ringgit in 2012 and 2013 respectively,” it said.

The bank set a target price of 1.50 ringgit per share.

At 0950, Perdana Petroleum was trading up 3.0 percent at 1.03 ringgit per share while the benchmark composite index was up 0.23 percent at 1,676.47 points.

0952 (0152 GMT) (Reporting by Siva Sithraputhran in Kuala Lumpur; Editing by Sunil Nair; siva.sithraputhran@thomsonreuters.com)

************************************************************* 0954: STOCKS NEWS MALAYSIA-Kenanga reduces target price for Petronas Chemicals

Kenanga Research has reduced its target price for Petronas Chemicals Group Bhd, Malaysia’s largest producer of integrated chemicals, to 6.99 ringgit from 7.46 ringgit citing a short-term negative impact from the company’s divestment of its vinyl business.

“The exercise is expected to impact earnings in the near term, but the longer run outcome should be positive as the company could focus on its high-margin products that are more closely integrated within the product value chain,” said Kenanga in a report on Tuesday.

The brokerage maintained its ‘outperform’ call on the stock, which hit a year-to-date low of 6.43 ringgit earlier this month. At 9.50 am (0150 GMT) it was down 0.62 percent at 6.38 ringgit.

Petronas Chemicals will incur a cost of 560 million ringgit to discontinue its vinyl business, which was said to perform unsatisfactorily relative to the company’s other segments.

The vinyl business makes key products essential to the manufacturing of pipes, roofing tiles, wires and cables. The company’s vinyl plants in Malaysia and Vietnam will require up to three years for decommisioning, it said in a statement yesterday. State-owned Petroliam Nasional Bhd remains the company’s largest shareholder, with a 64.4 percent stake.

0950 (0150 GMT) (Reporting by Al-Zaquan Amer Hamzah in Kuala Lumpur; Editing by Sunil Nair; alzaquan.amerhamzah@thomsonreuters.com)

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