AmInvestment Bank maintained its ‘overweight’ recommendation for the oil and gas (O&G) sector after being driven by better prospects despite relatively weak order flow in the fourth quarter of 2020 (Q42020).
In a report on the sector today, the investment bank said it did not include general employment, information and communication technology (ICT) Dynamics contracts in the United Arab Emirates (UAE), new contracts awarded to Malaysian operators last year declined by 42% year-on-year to RM6.6 billion.
"However, if it includes the UAE big project to Serba Dinamik, new orders for last year instead increased by 38% year-on-year to RM15.8 billion.
"The launch of new projects is still slow in Q42020 with new contracts declining 32% year-on-year to only RM1.5 billion," he said as reported by Bernama.
However, added AmInvestment Bank, the figure is still good compared to the three-year low recorded in the first quarter of 2020 at RM569 million and this is supported by the worst impact Covid-19 has ended amid the prospect of strengthening order flow in half second 2021.
Meanwhile, in terms of financial results for the fourth quarter of financial year 2020, the investment bank explained that five of the nine companies under its coverage performed well in their expectations and three more exceeded their expectations.
