KUALA LUMPUR: MISC Bhd share price rose to a high of RM7.30 this morning as CIMB Research points out the likelihood that its parent Petroliam Nasional Bhd (Petronas) may rethink its strategy of having its own fleet of liquefied natural gas vessels for future shipments.
At 11.22 am, MISC’s stock price retreated to RM7.21, up nine sen or 1.3% with over 1.5 million shares changing hands.
In a note today, CIMB Research suggests that ship ownership is now “relatively low priority” for Petronas.
“Considering Petronas’s ongoing commitments in various oil & gas (O&G) projects and the more lucrative internal rate of return promised in O&G upstream businesses, ship ownership is relatively low priority. Hence, we think Petronas may sell its four LNG vessel newbuildings to MISC,” said CIMB Research.
”If Petronas does sell these vessels to MISC, Petronas will likely charter these ships from MISC to meet its shipping requirements at Bintulu and other ongoing projects, like FLNG1,” it added.
This will augur well for the shipping group’s future earnings growth should that happen.
Last year, Petronas decided to buy its own LNG ships as part of its strategy to optimise the value of its LNG business and later bought four LNG vessels.
CIMB Research made an "add" call on MISC with RM8.22 as the target price.