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Nikkei Markets

MARKET BUZZ: CIMB Ups Malaysia's Oil & Gas Sector Call On Petronas Capex

By Chong Sin Hao
Nikkei Markets
KUALA LUMPUR (Dec 15) -- CIMB Investment Bank raises Malaysia's oil & gas sector call to Overweight from Neutral, on higher capex estimates from Petronas. "Given that Petronas' guidance for its future capex appears to have increased over the past nine months, we think that Petronas' capex budget for 2018 and beyond may have been based on an average oil price that is higher than this year's $45/barrel assumption," says house in investor note. Petronas expects oil price to hover around $50-$60 per barrel, the national oil and gas company said in its Activity Outlook 2018-2020 report earlier this week. Outlook of jack-up drilling rigs, engineering and construction has improved on higher demand. CIMB's top sector picks are Dialog Group and Yinson Holdings, due to good track record in execution and their business models have relatively low-risk profiles. Shares now flat at MYR2.46 and down 0.5% at MYR3.84, respectively.
- By Chong Sin Hao; Dave.Chong@nikkeinewsrise.com; +60320267363
- Edited By Shreejay Sinha
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- Copyright (c) 2017 Nikkei NewsRise Asia Pte Ltd.

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