KUALA LUMPUR (March 16): There was no love for Malaysian oil and gas (O&G) stocks this morning, which continued to experience selling pressure beyond the onslaught last week, as investors opted to cut losses and avoid the sector for now.

The Bursa Malaysia Energy Index fell another 7.68% at the time of writing to fresh lows of 654.18 points, as oil prices headed south again today and more than erased Friday’s rebound.

Brent crude oil price fell 3.01% at the time of writing to US$32.83/bbl, as Covid-19 pandemic fears heightened concerns from the ongoing price war, and the US Federal Reserve's rate cut on Sunday failed to soothe the wider market.

O&G counters topped Bursa Malaysia's most active stocks, led by Borneo Oil Bhd as trading volume surged to 63.67 million shares, followed by Bumi Armada Bhd and Velesto Energy Bhd.

Previously an industry top pick, floating, production, storage and offloading player Yinson Holdings Bhd led the sector’s losers with the counter down 5.09% or 29 sen to RM5.41. Year-on-year, however, the stock was still up 19.69%.

Also hit was refiner cum retailer Petron Malaysia Refining & Marketing Bhd, down 7.74% or 27 sen to RM3.22 — bringing its year-on-year decline to 51.94%.

The heavy selling across the sector would bring difficulty to companies still trying to find their footing since the 2014 downturn, such as Scomi Energy Services Bhd, TH Heavy Engineering Bhd, Barakah Offshore Petroleum Bhd, Sumatec Resources Bhd, and Daya Materials Bhd.

However, the only counter that has weathered the negative sentiment today is shipping group MISC Bhd, which traded unchanged at RM7.40. The counter is still up 9.31% compared with a year ago.

Analysts are expecting MISC to enjoy higher tanker rates in the short term, as the Saudi-Russia price war is expected to increase production and thus increase demand for shipping.

MISC fetched nine “buy” and five “hold” calls among 14 analysts, with an average target price of RM8.41, representing a potential gain of 13.6%.