O&G stocks rally on local bourse

HIGHER INVESTOR INTEREST: Trading triggered by overall positive market performance, stronger crude oil prices

STRONGER crude oil price and overall positive market sentiment lifted the interest in oil and gas (O&G) stocks on Bursa Malaysia.

Perisai Petroleum Teknologi Bhd and Hibiscus Petroleum Bhd were two most actively-traded stocks on the local bourse yesterday. They closed 20 per cent and 6.67 per cent to nine sen and 40 sen, respectively.

SapuraKencana Petroleum Bhd rose 1.2 per cent to RM1.65 and UMW Oil & Gas Corp Bhd added 3.8 per cent to 83 sen.

Analysts said the higher O&G stock prices were generally triggered by the overall positive market performance.

The FTSE Bursa Malaysia KLCI edged up, closing higher at 1,630.30 points.

They said the O&G stocks were also driven by the increasing Brent crude oil prices, which rose more than 1.5 per cent yesterday to extend gains for the month to more than 10 per cent as the agreement by major oil producers to cut output allayed oversupply concerns.

Brent crude climbed higher to US$56.31 (RM252.2) yesterday as at 5pm.

Production of crude oil will be cut by almost 1.8 million barrels per day from January 1 under the first crude oil output cut agreement between the Organisation of the Petroleum Exporting Countries (Opec) and non-Opec countries in 15 years.

“I think the driver behind the higher share prices of the local O&G companies yesterday was the positive performance of the local market itself. But one of the many reasons was also the higher price of crude oil,” an analyst with a local bank-backed research firm told Business Times yesterday.

The analyst said the driver behind Perisai Petroleum’s share price increase was its dispute settlement with Singapore-listed Emas Offshore Ltd (EOL) recently.

The companies agreed on Perisai Petroleum’s plan to sell its 51 per cent stake in ship charterer SJR Marine (L) Ltd, which is 49 per centowned by EOL.

Under the agreement, Perisai Petroleum was allowed to exercise a put option and get joint-venture partner EOL to buy the rest of the SJR Marine stake at US$43.03 million.

Meanwhile, Hibiscus had earlier in the month announced a new business plan for next year, which included managing its cost and focusing on enhancing production.