Thursday 12 January 2012

Bumi Armada dips, concerns of risky markets

KUALA LUMPUR (Jan 12): Bumi Armada shares dipped on Thursday as analysts were concerned about the longer term outlook for its business in a riskier market.

At 11.06am, it was down one sen to RM4.10. There were 383,000 shares done at prices ranging from RM4.09 to RM4.12.

UOB Kay Hian Malaysia research had initiated coverage on Bumi Armada with a Sell and sum-of-parts target price of RM3.16.

“Despite the promising macro outlook for floating production storage and offloading (FPSO) platforms within the region, Bumi Armada remains one of the most expensive stocks within the oil & gas services sector.

“Minimal exposure in Malaysia, limited lifespan on FPSOs, concentrated revenue stream on a singular asset, exposure to risky markets/counter parties and coupled with a short operating track record are inherent risks the market should not ignore,” it said.



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