KUALA LUMPUR: Oil and gas companies in Malaysia are seeing a future full of optimism. The positive energy comes on the heels of better reports for the market after fears of a potential recession wracked the country late last year. The latest set of financial results released by these counters have been mixed as the first three months of the year has usually been a slow period due to the seasonal monsoon weather patterns but analysts pointed out that this time around, political risks had also played a part in having an impact on the industry. Alliance Research analyst Arhnue Tan told StarBiz that the latest quarterly results showed momentum for most of the counters were still slow and would pick up substantially in the second half of the year. Her top pick was SapuraKencana Petroleum Bhd. “Overall, the industry has been lagging since 2012 until the 13th General Election. We expect more contracts to be dished out going forward," she said. Nevertheless, some in the market perceive oil and gas stocks as expensive due to the rally in their prices with some having hit fresh highs but Tan said valuation was relative depending on the yardstick used. “We can see some consolidation in the near term and there will be opportunities to buy on price weakness," she said, adding that investors could look at some of the laggards like Bumi Armada Bhd and Coastal Contracts Bhd and choose what to buy based on their earnings growth. Meanwhile, analysts who cover oil and gas stocks remains "overweight" on them. In fact, following the release of their results, Uzma Bhd and Dayang Enterprise Bhd have been upgraded. They have tweaked their expectations accordingly as Uzma's net profit for the quarter ended March 31 jumped 61% to RM8.9mil, exceeding their expectations. BN
