KUALA LUMPUR (March 20): AffinHwang Capital Research has downgraded SapuraKencana Petroleum Bhd (SAKP) to “Hold” at RM2.29 with a lower target price of RM2.30 (from RM2.60) and said that in view of the sustained weak oil price and capex cut by oil producers, SAKP’s business outlook looks challenging.

The research house in a note Friday said it had therefore cut SAKP’s FY16-17E EPS by 18-19%, and downgraded the stock to Hold.

“SAKP may book impairment losses in its 4QFY15 results.

“While these losses are non-operational, they will likely weaken its balance sheet and cap its borrowing headroom,” it said.