Frenzied buying of oil & gas stocks on Bursa

PETALING JAYA: In what was a rare occasion on Bursa today, the local bourse saw the top 10 most active list being fully dominated by oil and gas (O&G) and related stocks, which attracted investors’ interest on hopes that supply cuts will boost global crude prices.

Frenzied buying of O&G stocks led to a 27.07-point, or 2.61%, jump in the Energy Index to 1,063.01 points today from 1,035.94 points yester. It was the best performing index on Bursa Malaysia.

As at 6pm today West Texas Intermediate and crude oil futures were trading 0.9% and 0.61% higher at US$57.40 and US$67.10 per barrel, respectively.

On Bursa Malaysia, Naim Holdings Bhd was the top gainer today after it hit limit-up at RM1.20, closing 30 sen or 33.33% higher with 68.10 million shares traded.

Among the most actively traded stocks were Sapura Energy Bhd, Perdana Petroleum Bhd, KNM Group Bhd, Bumi Armada Bhd, Velesto Energy Bhd and Barakah Offshore Petroleum Bhd.

Sapura Energy was the most actively traded stock, with 370.10 million shares done. It rose 4.62% to close at 34 sen.

Perdana Petroleum’s jumped 50% to close at 45 sen with 339.98 million shares done. This was followed by Alam Maritim Resources Bhd and Barakah Offshore Petroluem Bhd, which soared 20% and 19% to 15 sen and 12.5 sen, res-pectively.

Oil prices were lifted by ongoing supply cuts led by Organisation of the Petroleum Exporting Countries (Opec) and its allies including Russia (known as Opec+), which had agreed in December last year to reduce supply by 1.2 million barrels per day (bpd) beginning this year, for a period of six months.

According to a Reuters report last month, Opec’s fell almost 800,000 bpd in January to 30.81 million bpd.

Meanwhile, Saudi Arabia plans to cut its crude to below 7 million bpd in April while keeping its output below 10 million bpd.

A Reuters report quoting a Saudi official, said that state-owned Saudi Aramco’s oil allocations for April are 635,000 bpd below customers’ nomination.

Despite strong demand of more than 7.6 million bpd, its customers were allocated less than 7 million bpd.

Saudi Khalid al-Falih said that March was 9.8 million bpd and that the country plans to keep its April output at the same level.

Closer to home, the O&G sector was also boosted by state-owned Petroliam Nasional Bhd’s (Petronas) commitment of a higher capital expenditure (capex) of over RM50 billion for 2019, as it focuses on plans to venture into new businesses such as renewable energy and specialty chemicals.

Last year, the national oil firm spent RM46.8 billion on capex, with a focus on the upstream projects. The RM46.8 billion is 5% higher than the previous year.

The higher capex is expected to spur local upstream activities, with potential beneficiaries being fabricators and floating production storage and offloading players.

Source: The Sun Daily

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