KNM .....

KNM’s new proposed yard in Saudi and new higher value contracts convince us that the future remains bright for this O&G favourite. We accordingly revise up its Average Selling Price per tonne which boosts our 2008 earnings estimates although this is slightly offset due to KNM aborting its proposed acquisition of Vickers Hoskins. The glowing prospects for both the Malaysian onshore O&G sector as well as Global process equipment market means that this stock should be key in any O&G portfolio.