Glow From Indonesia Deal May Fade for CNOOC

摘要

Hong Kong―Why would you want to hand over more than half a billion dollars to a company operating in two of the world's riskiest investment environments if the most you expected in return was an earnings increase of 10%? Analysts have been singing the praises of a plan announced last month by CNOOC Ltd., the Hong Kong-listed subsidiary of China's national offshore oil company, to purchase a bunch of Indonesia oil fields for US$585 million. Shares of CNOOC have risen to HK$7.95 (US$1.02) early last week from HK$7.75 before the Jan. 18 announcement as several analysts upgraded their earnings forecasts for the company. But will the stock-price rise be more than a blip? Make no mistake, there was pressure on CNOOC to do something with the more than US$1 billion it had sitting in the bank, earning close to no interest. Investors in a company want more than just bank interest in exchange for the risk of holding a stock.