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, December 24, 2010

Petronas Carigali to be Bursa's big draw

By Sharen Kaur

Analysts have been told by Bursa Malaysia officials of a possible IPO for Petronas Carigali, says a head of research

Petronas Carigali Sdn Bhd, the exploration unit of Petroliam Nasional Bhd, may be listed on Bursa Malaysia next year and it is expected to attract a large number of foreign funds.

"The mother of all initial public offerings (IPO) next year will be Petronas Carigali. We need companies like this to make Bursa attractive," said MIDF Amanah Investment Bank Bhd senior vice president and head of research, Zulkifli Hamzah.

Petronas officials could not be reached for comment. Zulkifli said analysts have been told by Bursa officials of a possible IPO for Petronas Carigali.

OSK Research head Chris Eng said Petronas Carigali should be the largest IPO ever in Malaysia, with a potential market value of close to RM150 billion.

This would eclipse current leader Malayan Banking Bhd, with a market value of RM62 billion as at yesterday.

Zulkifli also expects foreign shareholdings in the local equity market to rise to more than 26 per cent next year from 21.7 per cent now.

This will be spurred by the reclassification of Malaysia as an Advanced Emerging Market effective June 2011 under the FTSE indices. It is estimated that foreign funds with some US$3 trillion (RM9.4 trillion) track these indices.

Zulkifli told reporters at a media briefing in Kuala Lumpur yesterday that MIDF is bullish about the 2011 economic outlook.

"We are bullish, but with a caveat. The caveat is how crude oil price is going to unwind. If it hits US$110 (RM343) per barrel, then fear factor will hit.

"If it goes beyond US$110, then the world could enter another economic crisis. People will move back to US dollars for safety," Zulkifli said.

On the eight short-term factors, Zulkifli said Malaysia can expect more mergers and acquisitions, while corporate earnings growth may hit 15.8 per cent from 14 per cent now on strong growth in banking, plantation and construction sectors.

"We also see bigger IPOs next year, a rally in crude oil and commodity prices and contribution from the Economic Transformation Programme," he said.

The benchmark FTSE Bursa Malaysia KLCI is expected to trade between 1,475 and 1,650 points next year, representing up to 18 times its 2011 earnings.

Read more: Petronas Carigali to be Bursa's big draw

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