KUALA LUMPUR (April 13): Sumatec Resources Bhd jumped as much as one sen or 8%, boosted by rising crude oil prices and after the company fixed its private placement share price.
Sumatec shares rose to their highest so far today at 14 sen before paring gains to trade at 13.5 sen for a market capitalisation of RM475.2 million.
The second most-active stock on Bursa Malaysia saw some 54 million shares transacted.
Sumatec undertakes upstream oil and gas operations. As such, the stock is closely watched against crude oil price movements.
The stock could have taken the cue from the substantial overnight rise in crude oil prices to above US$44 a barrel before profit taking dragged prices down today.
Reuters reported that oil futures fell in Asian trade on Wednesday as profit taking and concern over a larger-than-expected build in US crude stocks outweighed a report that Russia and Saudi Arabia had reached consensus on an oil output cap.
Brent crude had dropped 27 cents to US$44.42 a barrel as of 0207 GMT after hitting a four-month high in the previous session, when it settled up US$1.86, or 4.3%.
US crude dropped 37 cents to US$41.80 a barrel after settling up US$1.81, or 4.48%, the day before.
Sumatec's private placement of up to 348.27 million new shares is also closely watched.
Yesterday, Sumatec said it had fixed the placement share price at 14 sen each, which is equivalent to the stock's par value.
There are not many analysts covering Sumatec. According to Bloomberg data, the sole coverage is from Eva Dimensions analyst Neil Fonseca, who has a "buy" call for Sumatec shares.
There was, however, no indication on Eva Dimensions' target price for Sumatec shares.
Remisiers have also noted Sumatec's share gain. Interpacific Securities remisier Sam Ng told theedgemarkets.com that Sumatec's placement share price was "encouraging institutional buyers" amid stronger global oil prices.
"The factors are favourable for Sumatec because of the private placement and oil price. Investors are feeling positive about this counter," Ng said.
SUMATEC (1201) - Sumatec up 8% on rising oil prices, private placement
http://www.theedgemarkets.com/en/article/sumatec-8-rising-oil-prices-private-placement
