Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Friday, November 12, 2010

OSK keeps 'buy' call on Kencana

Published: 2010/11/12

Kencana Petroleum Bhd is expected to land some new contracts soon given the improving sentiment in the local oil and gas (O&G) industry, said OSK Research.

In its research note today, OSK said the contracts may include fabrication and hook-up and commissioning jobs.

OSK said with crude oil price stabilising at close to a one-year high since the fourth quarter of 2009 of US$70-US$80 a barrel, Petroliam Nasional Bhd and its production-sharing contractors would commence major capital expenditure.

"Also, since the O&G sector has been quiet over the past two years, any new contracts would start with fabrication and cascade down to other support services such as support vessels, pipe laying and so on," it said.

It said it was upbeat Kencana should be receiving new contracts anytime soon.

The research house has maintained its ''buy'' call on the company and raised the target price to RM2.57.

"The higher valuation was based on expectation that the listing of Malaysia Marine and Heavy Engineering Holdings Bhd has started the ball rolling for a re-rating of most of the share prices of O&G stocks," it said. -- Bernama

Read more: OSK keeps 'buy' call on Kencana

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