O&G, Plantation Stocks Lead Early Gains Amid Strait Of Hormuz Blockade Concerns
KUALA LUMPUR, April 13 (Bernama) -- Oil and gas (O&G) and plantation stocks are among the top gainers in early trade today following the United States (US) announcement of a blockade over the Strait of Hormuz, which is expected to propel global oil prices upward.
At 9.57 am, O&G related counters such as Petronas Dagangan rose 28 sen to RM21.08, Petronas Chemicals jumped 25 sen to RM6.07, and Hibiscus Petroleum gained nine sen to RM2.18. Plantation stocks including United Plantations garnered 28 sen to RM33.28 and SD Gurthie increased 10 sen to RM6.09.
According to M+ Global Research by Malacca Securities Sdn Bhd, the waterway faces a “double bottleneck” from both Iran and the US, as Tehran has indicated it is in no hurry to reopen the strait, while the US Navy is set to begin blockading ships entering or leaving the passage.
“This is expected to drive oil and liquefied natural gas (LNG) prices higher, as approximately 25 per cent of global oil and 20 per cent of LNG supply pass through the strait,” it said in the note.
“This also potentially translates into trading opportunities within the O&G and chemical sectors.
“Sentiment should also bolster the plantation sector, as the market may pivot toward biofuels as a partial substitute for fossil fuels,” it added.
At time of writing, Brent crude oil price rose 6.91 per cent to US$101.78 per barrel.
-- BERNAMA