RHB Investment Bank started coverage on oil and gas company Perisai Petroleum Teknologi Bhd with an 'outperform' call on prospects of strong earnings and more domestic orders from state oil company Petronas .
RHB assigned a fair value target of 1.47 ringgit per share to the company.
With Ezra Holdings as the majority shareholder, Perisai will be able to leverage on the Singapore-listed firm's large asset base of specialised and niche vessels to expand its own assets, RHB said.
"We believe Perisai can internally fund its purchase of the new jack-up rig. However, beyond that, we expect Perisai to raise capital through equity issuance to fund new asset acquisitions," RHB said in a note to clients.
Although expanding the balance sheet would dilute earnings, RHB expects it would be earnings accretive as the assets would likely provide a step-up in recurring income in future.
Shares in Perisai rose 0.5 percent on Monday, outperforming the broader market that dropped slightly.
0213 GMT
(Reporting by Niluksi Koswanage in Kuala Lumpur; niki.koswanage@thomsonreuters.com; Editing by Prateek Chatterjee)
*********************************************************** STOCKS NEWS MALAYSIA-Maybank falls on $1.2 bln share offer
Shares of Malayan Banking Bhd (Maybank) dropped as much as 0.67 percent after the largest bank by assets in Malaysia said it would raise $1.2 billion with a new share offer to fund growth in the country and its regional subsidiaries.
"This sounds logical to us as Maybank may be required to bring in capital if it is required to locally incorporate its Singapore subsidiary, which currently holds a qualified full banking licence," HwangDBS Vickers Research said in a note on Monday.
Maybank said on Monday it completed the bookbuilding exercise for the private placement, the largest so far in Malaysia's corporate history.
The placement is a proactive move to boost Maybank's equity capital ahead of the implementation of the stringent new solvency requirements of the Basel III global banking regulations, Maybank said in a statement.
The issue price was fixed at 8.88 ringgit a share, Maybank said, while the total number of shares to be issued represents 4.98 percent of the enlarged issued and paid-up share capital of Maybank as at Sept. 30.
The private placement exercise is expected to be completed no later than the middle of October, added Maybank.
HwangDBS maintained its 'buy' rating on Maybank stock with a target price of 11.10 ringgit.
"Maybank remains our top pick and we believe our investment thesis of high dividends and strong earnings momentum remains intact despite these developments," said HwangDBS.
The stock was down 0.56 percent at 8.94 ringgit, underperforming the broader index's 0.15 percent drop.
0157 GMT
(Reporting by Yantoultra Ngui in Kuala Lumpur; Editing by Gopakumar Warrier; yantoultra.ngui@thomsonreuters.com)
Keywords: MARKETS MALAYSIA STOCKSNEWS/PERISAI