Strong 4Q16 cash flow, cost control and lower capex helped Petronas defend its ample cash balance. Although Petronas may likely remain focused on key projects, ie completing the Pengerang complex and the Aramco-partnership, channel checks suggest more upstream contracts to come. Nevertheless, we believe these will be selective. FPSOs remain the only clear sector earnings drivers. Maintain MARKET WEIGHT; Top picks: Bumi Armada and Yinson.

Source: UOB Kay Hian Research - 15 Mar 2017