SapKen downgraded on weaker stock performance

SapuraKencana Petroleum Bhds Lumut fabrication yard

PETALING JAYA: Hong Leong Investment Bank (HLIB) has downgraded SapuraKencana Petroleum Bhd (SapKen) to a “sell”, with an unchanged target price of RM1.64, on the worsening stock performance due to the short-term recovery of crude oil prices amid speculation of a supply cut by major oil producers.

With an overall uncertain outlook, HLIB in its published report said although SapKen had bagged contracts and contract extensions with a combined value of about US$382mil (RM1.6bil), it was neutral on the news, as most of the contract value was from both maintenance contracts spanning 10 years.