• Turned around after a loss-making FY16 . FY17 core net profit stood at RM282.0m against a loss of RM151.8m in FY16 on the back of the turnaround in FSPO division upon commencement of Olombendo and partial contribution from Kraken. Also, the stronger OMS division contribution due to supplementary contract revenue from Lukoil.

• Healthy crude oil prices could lift trading interest amongst O&G stocks . As we have issued a trading idea for WTI earlier this week, we were anticipating a symmetrical triangle breakout on WTI. Meanwhile, Brent oil has surged above US$66 and could be heading towards the resistance of US$69.8-70.0. Hence, we expect further trading interest on O&G counters. Brent oil’s LT target will be located around US$88 (extrapolated using the inverted Head and Shoulders formation).

• Bumi Armada forming an inverted Head and Shoulders pattern . Following the breakout of the neckline around RM0.80, prices have been stabilising between RM0.80-0.90 over the past three months. With the recent retest of the support near RM0.80, coupled with a short term breakout above RM0.845 level yesterday, we expect follow-through buying support towards the near term resistance of RM0.90-0.975, followed by a LT target of RM1.15. Further support will be pegged around RM0.79, with a cut loss set around RM0.785.

Source: Hong Leong Investment Bank Research - 22 Mar 2018