KUALA LUMPUR: MISC Bhd is eyeing a recovery next year on expects that the Organisation of the Petroleum Exporting Countries (Opec) will raise production quotas in tandem with rising global consumption.

       The management is cautiously optimistic on petroleum tanker rates, which have doubled year-on-year (y-o-y) to US$11,000 (RM46,337.50) per day for Suezmax and risen 76% y-o-y to US$8,800 (RM37,070) a day for Aframax.

       However, very large crude carriers’ (VLCC) rates remained depressed, halving y-o-y at only US$6,700 (RM28,223.75) a day.

       In a recent report, AmInvestment Bank said it expects modest improvement to petroleum tanker rates as Opec+ plans to raise production levels by two million barrels from August to December 2021 amid the winter season, which is usually the peak tanker cycle.

       “Together with the delivery of six dynamic positioning shuttle tankers and two VLCCs next year, this is expected to support MISC’s financial year 2022 (FY22) earnings growth prospects,” the research house said.

       Following a recent engagement with MISC’s group chief executive officer, AmInvestment said it is maintaining its “buy” call on the stock with an unchanged sum-of-parts-based fair value of RM7.75.

       MISC was relatively subdued in bidding for new contracts this year as the group focused on the execution of its existing projects amid the uncertain impact of Covid-19.

       However, AmInvestment said the group is eyeing fresh contracts which include floating production storage and offloading (FPSO) projects that could cost US$1bil-US$2bil (RM4.21bil-RM8.42bil) and liquefied natural gas carriers as rates have risen 62% y-o-y to US$128,000 (RM539,200) a day.

       FPSO tenders currently appear to be single-bidder propositions given the limited number of financially viable operators.