KUALA LUMPUR, Feb 11 (Reuters) - Shares of Coastal Contracts Bhd rose as much as 3.9 percent after a unit of the Malaysian oil field services firm and rig builder won a 1.24 billion ringgit ($371.42 million) charter contract in Mexico.
“We are significantly surprised and positive on the win, as we had not seen this coming,” Kenanga Research said in a note to clients on Tuesday.
“It also represents another chapter for Coastal Contracts in its bid to move into asset ownership, versus just being a shipbuilding and trading company,” the research house added.
Coastal Contracts said on Monday the charter contract entails the supply of a jack-up rig with gas compression capabilities to a group of Mexican firms, which earlier won a gas compression service contract with Mexico’s national oil company Petroleos Mexicanos (Pemex).
Kenanga Research maintained its target price on Coastal Contracts at 4.51 ringgit per share with an unchanged ‘outperform’ rating as it is not including the earnings from the charter contract in its 2014 forecast.
The contract will only kick-start in the second half of next year, Kenanga said.
Shares of Coastal Contracts were 2.93 percent higher at 4.21 ringgit each at 0109 GMT, outperforming the benchmark index’s 0.14 percent rise.
($1 = 3.3385 Malaysian ringgit)
Reporting by Yantoultra Ngui; Editing by Stephen Coates