Sime Darby powers KLCI while oil stocks advance

KUALA LUMPUR: Positive news flow from Sime Darby and gains in crude oil prices aided Petronas linked stocks pushed the FBM KLCI firmly higher early Tuesday.

At 9.38am, the KLCI was up 5.83 points or 0.35% to 1,671.15. Turnover was 215.26 million shares valued at RM145.81mil. There were 247 gainers, 130 losers and 243 counters unchanged.

Asian shares were mixed in early Asian trading on Tuesday after oil prices surged to a one-year high, Reuters reported.
Brent crude rose to as high as US$53.73 on Monday, the highest level since Oct 9, 2015. It closed up 2.3% at $53.14. US crude futures jumped 3.1% to US$51.26 on Monday, a four-month high. They were trading 0.1% lower at US$51.28 at 0022 GMT.

Kenanga Investment Bank Research pointed out the ringgit is weakening further, to 4.15 levels against the greenback, which does not argue well for the market sentiment. 

“On the flipside, crude oil prices are trending upward to above the US$50 a barrel levels which is bringing cheers to some oil & gas stocks. 

“As we expect the market to remain range trading, we adhere to our trading strategy of Buy on Weakness zone of below 1,625 and Sell on Strength level above 1,715 which is our end-2016 index target,” said the research house.

Sime Darby rose nine sen to RM7.86 after the conglomerate signed an implementation agreement with Japan Residential Asset Manager Ltd (JRAM), the manager of Saizen REIT for the reverse takeover of Saizen REIT.

Petronas Dagangan added 20 sen to RM23.70 and Bumi Armada gained one sen to 70.5 sen.

Among the other gainers, KLCC and Superlon added nine sen to RM7.84 and RM2.41. CCK jumped 7.5 sen to 67.5 sen.

BAT was the top gainer, up 70 sen to RM49.50 but F&N fell 28 sen to RM23.90 with 500  shares done.

Bina Puri rose 3.5 sen to 45 sen. Bina Puri will team up with CCCC Dredging (Group) Co Ltd to build the Kuantan Waterfront Resort City with a gross development value of RM15bil over the next 10 years.

Perisai was flat at 7.5 sen with 29.9 million shares done. Perisai shares have sunk to an all-time low. 

For the financial year ended Dec 31, 2015, the company posted a loss before tax of RM688.15mil compared with a pre-tax profit of RM27.87mil in the preceding year. The loss attributable to shareholders was RM706.32mil.