PETRONAS GAS BHD (PGAS:KL) will not be affected with Moody’s downgrade

PETRONAS GAS BHD (PGAS:KL) will not be affected with Moody’s downgrade

PETRONAS GAS BHD (PGAS:KL) will not be affected with Moody’s downgrade

Prime Minister Tun Dr Mahathir Mohamad (picture) said that Moody’s Investors Service Inc recent downgrade of Petroliam Nasional Bhd’s credit rating may be inaccurate but believed change would not impact the state-owned energy company.

“That is Moody’s assessment, but they are not necessarily right. Sometimes some agencies make inaccurate assessments, but we can’t criticise them because they are free to do so,” he told reporters after officiating the 20th Asia Oil and Gas Conference in Kuala Lumpur today.

“From what we see, I am confident the downgrade won’t affect Petronas,”  he said.

Moody’s downgraded Petronas’ domestic issuer and foreign currency senior unsecured ratings from A1 to A2 on Friday after updating its cross-sector methodology on sovereign credit quality.

The rating agency cited the linkages between the national energy company and its sole shareholder, the government were the reason behind the downgrade.

Its senior VP Vikas Halan said Moody’s cannot support a rating for Petronas that is two notches higher than that of the Malaysian sovereign despite the company’s credit metrics remaining strong.

Moody’s also downgraded Petronas’ baseline credit assessment from a1 to a2; the senior unsecured notes issued by Petronas Capital Ltd from A1 to A2 as well as its US$15 billion medium-term note program from (P)A1 to (P)A2; and Petronas Global Sukuk Ltd’s senior unsecured sukuk from A1 to A2.

But the ratings outlook for Petronas was upgraded from negative to stable.

Meanwhile Dr Mahathir said more casualties are expected if the US-China trade war persists while “games of provocation” in the Middle East is adding pressure to the oil and gas (O&G) sector.

“The O&G industry is indeed a cyclical business. History has shown that the ability to respond quickly with systematic and coherent strategies is necessary for longevity,” he said during his keynote address.

Petronas last Friday said its strong fundamentals remain unchanged despite Moody’s action to downgrade its ratings.

“Petronas has consistently maintained a conservative financial policy and healthy net cash balance that enables the company to withstand volatility and shocks in the market,” the energy company said in a statement.

On plans to reduce carbon emissions in the country, Dr Mahathir said Petronas is drafting an Oil, Gas, Energy and Environment White Paper to help Malaysia to be a low-carbon economy and fulfill its Paris Agreement pledge.

The Paris Agreement is a multinational agreement to combat climate change and stem the rise in global temperature substantially below two degrees Celsius.

Meanwhile, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said Malaysia’s goal is to increase the renewable energy generation to 20% of total installed capacity by 2025.

“To achieve this target, new renewable energy sources will be explored in addition to the current contribution from biogas, biomass, mini hydro and solar power,” he said at the conference.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 18.17.

The projected lower bound is: 17.03.

The projected closing price is: 17.60.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 25 white candles and 20 black candles for a net of 5 white candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 54.7620. This is not an overbought or oversold reading. The last signal was a buy 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 52.77. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 11 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -55. This is not a topping or bottoming area. The last signal was a sell 10 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 4 period(s) ago.

Rex Takasugi – TD Profile

PETRONAS GAS closed down -0.080 at 17.600. Volume was 83% below average (consolidating) and Bollinger Bands were 129% wider than normal.

Open High Low Close Volume___
17.780 17.780 17.580 17.600 147,800

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period     50-period     200-period
Close: 17.67 17.42 18.13
Volatility: 7 21 21
Volume: 546,050 904,936 971,043

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

PETRONAS GAS is currently 2.9% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of PGAS.KL at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on PGAS.KL and have had this outlook for the last 13 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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