KUALA LUMPUR (Feb 23): Shares of MISC BHD [] fell to a low of RM5.68 on Thursday after it reported net loss of RM1.74 billion in the third quarter ended Dec 31, 2011.

At 10.15am, it was down 10 sen to RM5.70. There were 99,400 shares done.

The FBM KLCI was just 0.25 of a point down at 1,560.27. Turnover was 484.02 million shares valued at RM320.93 million. Losers beat gainers two to one with 345 declining stocks compared with 177 advancers.

On Wednesday, MISC attributed the losses in 3QFY11 due to recognition of one-off provisions totalling RM1.45 billion. This was in stark contrast to the net profit of RM1.38 billion a year ago

For the nine-month period, MISC recorded a net loss of RM1.481 billion due to the recognition of one-off provisions totalling RM1.452 billion following its recent decision to exit from the liner business.

RHB Research said the shipping sector that has yet to fully recover from the previous global economic downturn in 2008-2009 is staring at the possibility of another prolonged downturn.

The crux of the segment’s problem has always been over-investment in capacity during good times in the mid-2000s. Now with the growth in demand for shipping services coming to a halt, the research house expected rates to deteriorate further.

“However, to a certain extent, MISC’s earnings will be cushioned with recurring income from its LNG division, as well as high earnings growth at its offshore business and MMHE.

“Indicative fair value is cut by 7% from RM6.15 to RM5.70 based on ‘sum of parts’, having updated MISC’s cash balance and our indicative fair value for MMHE,” it said.