Shares sink on Petronas’s plan to cut capex
Malaysia’s key stock index hit the lowest in more than six weeks today as state oil firm Petroliam Nasional’s plans to cut capital expenditure and falling oil prices hit oil and gas shares
Malaysia’s key stock index hit the lowest in more than six weeks today as state oil firm Petroliam Nasional’s plans to cut capital expenditure and falling oil prices hit oil and gas shares.
Petronas said late on Friday that it will cut capex for next year by 15-20 percent because of the falling oil prices.
Kuala Lumpur’s composite index was down 2.1 percent at 1,782.76, having hit 1,781.32, the lowest since Oct 17.
Losses were led by a 12.5 percent drop in shares of Sapurakencana Petroleum and a 13.8 percent loss in shares of UMW Oil and Gas Corporation.
Most Malaysian oil and gas services companies have exposure to, or depend on, contracts with Petronas and the cut in capex will have a negative impact on their earnings in the future, analysts said.
“Oil and gas shares were hit by Petonas’s plan to cut spending. The trend was also sentiment driven due to weak global oil prices,” said a Kuala Lumpur-based analyst.
- Reuters
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