Oil price surge lifts Petronas stocks as KLCI climbs

KUALA LUMPUR: The jump in crude oil prices lifted Petronas linked stocks and also oil and gas players including Sapura Energy and Bumi Armada in early trade on Monday.

At 9.15am, the FBM KLCI was up 10.61 points or 0.66% to 1,610.73. Turnover was 911.94 million shares valued at RM400.30mil. The broader market was firmer with 521 gainers, 178 losers and 337 counters unchanged.

At Bursa last week, foreign funds were net buyers at RM285.8mil and local retail investors at RM304.6mil but local institutions were net sellers at -RM590.3mil.

On the outlook for the market this week, TA Securities Research said the economic recovery theme will continue to dictate the upward momentum in the local equity market this week with more drivers supporting the increasingly brighter outlook.

While most recovery plays in the banking, gaming, aviation and oil & gas sectors have been enjoying a steady rally since late January on vaccine optimism and may continue to garner strong interest due to their cheap valuation vis-à-vis their earnings growth potential, there should be some rotational interest into the undervalued property sector as well in the coming months.

“This is because most stocks in the sector are trading at CY22 Price-to-Book multiple of 0.2 times to 0.4 times only, which is about 40% to 60% discount to their last 5-year average.

“With the economic recovery it is just a matter of time for improved sales to translate into much higher earnings.

“In terms of sales performance, eight property players that are being tracked, including the bigger ones like SP Setia, Sime Darby Property, IOI Property and Mah Sing, have witnessed aggregate sales increasing by 1.4% on-year and 19% on-quarter in fourth quarter of 2020.

“It was attributed to favourable policies and developers’ aggressive marketing and sales efforts, which are expected to gain momentum in 2021 and 2022, ” it said.

Asian shares rallied on Monday while the dollar held near three-month peaks after the U.S. Senate passage of a $1.9 trillion stimulus bill and a surprisingly strong payrolls report augured well for a global economic rebound, Reuters reported.

There was also upbeat news in Asia, as China's exports surged 155% in February compared with a year earlier when much of the economy shut down to fight the coronavirus.

Reuters also reported Brent crude futures jumped above $70 a barrel on Monday for the first time since the Covid-19 pandemic began, while U.S. crude touched its highest in more than two years, following reports of attacks on Saudi Arabian oil facilities.

Brent crude future up US1.40 to US71.16, US WTI up US1.32 to US67.41 on reports on Saudi oil facilities

Brent crude futures for May reached $71.16 a barrel in early Asian trade and were at $70.76 a barrel by 0036 GMT, up $1.40, or 2%.

U.S. West Texas Intermediate (WTI) crude for April rose $1.32, or 2%, to $67.41. The front-month WTI price touched $67.86 a barrel earlier, the highest since October 2018.

Petronas Chemicals rose 27 sen to RM8.09 and Petronas Gas added 16 sen to RM16.46. Hengyuan was up 16 sen to RM6.03.

Sapura Energy was the most active, up 1.5 sen to 16.5 sen while Perdana added 1,5 sen also to 18.5 sen. Bumi Armada gained three sen to 48.5 sen.

Velesto, Alam and KNM added one sen ech to 18.5 sen, 10 sen and 21.5 sen respectively.

Heineken was the top gainer, up 90 sen to RM25.60, MPI 30 sen to RM39.70, Press Metal 20 sen to RM9.80 and SAM Engineering 19 sen to RM7.10.

KL Kepong fell 20 sen to RM23.20, PPB Group 12 sen to RM18.60 and Sime Plantation was five sen lower at RM4.90.

Supermax lost nine sen to RM4.41 and Hartalega eight sen to RM9.67 but Top Glove edged up one sen to RM5.26.

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