Hot Stock UMW shares jump 9.5% this week on O&G listing talk

Hot Stock UMW shares jump 9.5% this week on O&G listing talk
Business & Markets 2013
Written by Madiha Fuad of theedgemalaysia.com
Thursday, 07 March 2013 16:19

KUALA LUMPUR (March 7): UMW HOLDINGS BHD [] stocks jumped for the fourth day in a row this week on market talk that its oil and gas (O&G) division will be listed on Bursa Malaysia after the general election.

The stock rose as much as 1.6% today. For the week so far, UMW’s share price soared by 9.5% from RM12.76 on Monday.

At 3.53 pm, UMW was trading at RM13.96 a share, up 20 sen or 1.4%, with some 2.4 million shares done.

It was the second top gainer and the third top turnover stock across the exchange.

“I believe that market speculation about UMW’s listing of its oil and gas division after election has served as a spark on its share price,” said an industry player.

Along with last week’s news of UMW’s strong fourth quarter results, the group also announced it was ‘currently in the midst of finalising the appointments of the relevant advisors’ to list its O&G division.

“Apparently, now the market is speculating that UMW would be listing its O&G unit in the next quarter. Maybe that is why people are grabbing the shares now,” added the industry player.

“We have a positive outlook on the stock and definitely we can see the reason why people are buying the shares now as we expect the O&G to contribute to profits,” said an analyst who declined to be named.

The stock rose despite a not-so-flattering report on UMW by UOB Kay Hian.

UOB Kay Hian said in a report today that it has given the stock a "sell" rating due to a “cautious approach to 2013 consumption”.

It added: “We gather from its recent analyst briefing that the O&G division will not grow aggressively going forward because it is constrained by UMW’s ability to secure contacts for new rigs and less by its ability to secure financing.”