Hot Stocks O&G counters seen ‘dominating’ the stock market

by **Cals** Mon 06 Jan 2014, 18:21

Hot Stocks O&G counters seen ‘dominating’ the stock market

Business & Markets 2013

Written by Jeffrey Tan of theedgemalaysia.com

Monday, 06 January 2014 17:30

KUALA LUMPUR (Jan 6): Oil & gas (O&G) counters were seen ‘dominating’ the stock market today, featuring in the top actives, gainers and even losers, due to various reasons for each respective share, dealers say.

At 4.39 pm today, the top active included Sumatec Resources Bhd, Daya Materials Bhd and KNM Group Bhd. Sumatec’s warrant (Sumatec-WB) was also among the top active.

Uzma was the top tenth gainer with trades of some 447,000 shares. The stock rose 19 sen or 4% to RM5.12.

Petronas Gas Bhd, however, fell 44 sen or 2% to RM23.16. The third top loser saw 272,000 shares exchanged hands.

“Sumatec’s and KNM’s heavy trades could be due to both counters being speculative stocks. Investors jump in as the volume spiked. Moreover for Sumatec, it could also be a ‘further play’ on its O&G field in Kazakhstan,” a dealer told theedgemalaysia.com over telephone.

The dealer said Daya Materials’ surge in trades may be due to the firm being listed under the stocks to watch list by a local daily.

“Looking at the top gainers, we see Uzma representing O&G counters. Uzma is seen strong, fundamentally.

“We think Petronas Gas fell, in line with the declining trend in the FBM KLCI and the weak opening in Japanese stocks for today. We deem it to be a ‘healthy correction’ though it may rebound later,” the dealer said.

Meanwhile, Kenanga Research in a note today said it maintained its ‘overweight’ call on the O&G sector as it opined the sector would continue to be on overdrive this year.

The research house said the outcome of the final investment decision for the Refinery and Petrochemical Integrated Development (RAPID) project is being closely watched, as it will spur a resurgence in interest for downstream O&G players.

The result is expected in the first quarter of this year.

Kenanga research analysts Teh Kian Yeong and Cezzane See said given its significance to the Malaysian economy, all efforts will be taken to ensure the project is a ‘good-to-go’.

The pair noted KNM, a process equipment & fixtures player, is among the potential beneficiaries.

“We rate Uzma an ‘outperform’ with target price (TP) of RM5.28, while we recommend an ‘underperform’ call on Petronas Gas with TP of RM20.77,” said Teh and See.