• HLIB institutional research maintains BUY on MISC with target price of RM8.92 (based on SOP) or 23.9% upside. We remain positive on the stock premised on (i) bottoming of LNG earnings as no major termination is anticipated with potential additional earnings from new vessels (ii) stronger 2017 Offshore contribution with full year consolidation of GKL earnings and (iii) Potential recovery in Petroleum tanker rates upon new vessel standard enforcement.
   
• Oversold with key supports near RM7.00-7.10 territory. Following the release of a weak 3Q16 earnings (on 2 Nov), share prices tumbled 5.3% from RM7.50 (2 Nov closing) to a low of RM7.10 (3 Nov) before closing at RM7.20 yesterday. We see limited downside from here as current P/B of 0.92x is close to its 10-year trough of 0.88x, supported by oversold slow stochastic indicator and tapering selling pressures.
   
• Once the sideways consolidation pattern ends, we expect prices to breakout to the upside. A decisive breakout above RM7.27 (23.8% FR) will spur prices higher to revisit RM7.37 (10-d SMA) and RM 7.58 (38.2% FR) before reaching our LT objective at RM7.75 (10 Oct high). Key supports are RM7.10 and RM7.00 psychological levels. Cut loss at RM6.99.

Source: Hong Leong Investment Bank Research - 10 Nov 2016