Dialog’s Shares Remain Flat Despite Securing US$235 Mln Investment

KUALA LUMPUR, Jan 10 (Bernama) -- Dialog Group Bhd's share price remained unchanged at mid-morning, despite receiving a US$235 million investment approval for the Baram Junior Cluster Small Field Asset Production Sharing Contract (PSC).

At 11.40 am, the company’s shares were flat at RM1.84, with 78.06 million units traded.

In a note, MIDF Amanah Investment Bank Bhd maintained its optimistic outlook on Dialog’s update and opined that the strategic move by the group will strengthen its upstream business.

“We expect Dialog’s upstream division to remain robust, given the expected higher demand for liquefied natural gas (LNG) within the region, as well as recent discoveries of oil and gas fields within offshore Peninsular and East Malaysia,” it said.

Nevertheless, the research firm continues to be vigilant of the possible risks of this PSC, including complex subsurface geology; availability of skilled workers, experts and materials; price volatility of raw materials; and changes in politics, economy and regulations.

Considering that the commercial production has yet to commence, MIDF Amanah makes no changes to its forecast projection for Dialog, and maintains its ‘buy’ call on the counter, with a target price (TP) of RM2.72.

Meanwhile, Hong Leong Investment Bank Bhd (HLIB) said it is looking forward to the group securing new long-term dedicated storage tank terminal contracts for its Pengerang Deepwater Terminals (PDT) Phase 3, with approximately 500 acres available for future development.

“We like Dialog for its recurring income business model and its unique position in riding the future expansion of Pengerang via the development of tank terminals,” it said, adding that it maintains its ‘buy’ call on Dialog with an unchanged TP of RM3.12.

-- BERNAMA