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Singapore Investment


Bursa: Oil and gas sector has highest percentage of 'buy' calls

KUALA LUMPUR (Sept 27): Bursa Malaysia said on Tuesday (Sept 27) oil and gas (O&G) stocks tracked by its Energy Index have the highest percentage of "buy" calls from sell-side analysts at 94% among Bursa gauges.

"Rating actions [for O&G stocks tracked by the Energy Index] over the last few months were generally skewed towards upgrades of either the rating or target price or a combination of both, making it the sector with the highest percentage of 'buy' recommendations on Bursa," Bursa Digital Research analysts wrote in a note.

Bursa Digital Research is the local bourse's research arm.

In a note titled “Oil & Gas — At the Crossroad”, the research division said the counters are currently trading at an average projected price-earnings ratio of 12.4 times for the current financial year and 9.7 times next.

“All 13 O&G stocks (there are 24 stocks in the Energy Index) rated by sell-side analysts have an equivalent 'strong buy' or 'buy' rating, with an average 12-month price return potential of 38%,” it said.

Based on Bursa Digital Research's analyst consensus compilation dated Sept 20, which was based on the August results session, the most recommended "buy" stocks with 100% calls were Yinson Holdings Bhd and Dayang Enterprise Holdings Bhd. The companies were covered by at least three analysts during the period.

It added that Yinson was covered by 11 analysts during the period, with all of them recommending to buy the stock.

The Energy Index, which tracks share prices of oil and gas related companies, was up 1.84 points or 0.27% at 684.19 at Tuesday's noon break, after the gauge traded between 677.49 and 685.78 in the morning session. The index opened at 679.76, from 682.35 at Monday’s close.

Meanwhile, the top six active stocks so far on Tuesday were Velesto Energy Bhd, Hibiscus Petroleum Bhd, Sapura Energy Bhd, Scomi Energy Services Bhd, Bumi Armada Bhd and Barakah Offshore Petroleum Bhd.

Reuters reported that oil prices rose on Tuesday, after plunging to nine-month lows a day earlier, on indications that producer alliance Opec+ may enact output cuts to avoid a further collapse in prices.

Opec+ refers to the Organization of the Petroleum Exporting Countries and its allies.


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