Shares in Hibiscus Petroleum up 10% on the back of capital reduction plan, oil price rally

KUALA LUMPUR: Shares in Hibiscus Petroleum Bhd climbed in early morning trade following the announcement of its capital reduction plan as well as a sharp increase in crude oil prices overnight.

At the open, the stock was trading at a three sen premium of 90 sen a share and reached a morning high of 98 sen a share.

As at 10.48am, shares in the oil and gas exploration and production company were trading at 95.5 sen a share, representing an 8.5 sen or 9.77% increase over the reference price.

The counter was the third most heavily traded on Bursa Malaysia with 34.35 million shares exchanging hands.

Investors are jumping into Hibiscus shares following the company's announcement yesterday that it would embark on a capital reduction involving a reduction of RM800mil of its issued share capital as well as a share buyback of up to 10% of its issued shares.

It said the capital reduction would eliminate the company’s accumulated losses and hence enable it to have a retained earnings balance to facilitate the proposed buyback.

Meanwhile, energy stocks on Bursa Malaysia are on the rise as Brent crude returned above the US$90 a barrel mark in overnight trading as an upcoming Opec+ meeting to discuss production cuts could lead to a tighter squeeze in the supply market.

The benchmark crude index rose to a high of US$92.40 a barrel in the previous session before retracing some gains to end at US$91.80 a barrel.

The Bursa Malaysia Energy Index jumped about 3% to a high of 708.55 in early morning trade with most of its constituent counters embarking on a rally.

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