KUALA LUMPUR (April 13): Energy stocks on Bursa Malaysia resumed their uptrend on Monday, following news of the US’ plan to blockade Iranian ports.
The Bursa Malaysia Energy (BM Energy) index ended Monday up 2.27%, in contrast to the broader market decline. Hibiscus Petroleum (KL:HIBISCS) was up 5.26% at RM2.20; Bumi Armada Bhd (KL:ARMADA) was up 5.26% at 40 sen; Hengyuan Refining Co Bhd (KL:HENGYUAN) was up 4.2% at RM1.24; and Dialog Group Bhd (KL:DIALOG) was up 4.11% at RM2.28.
Aside from the energy index, BM Industrial Products & Services and BM Plantation were the only other sectoral indices that ended Monday with gains. The BM Healthcare, BM Financial Services and BM Technology indices led losers.
Petronas Chemicals Group Bhd (KL:PCHEM), a component of the BM Industrial Products & Services index, was up 3.44% at RM6.02.
The war in Iran has resulted in a surge in fuel prices globally, as the conflict saw attacks on oil and gas facilities and, more importantly, a blockade of a major shipping bottleneck, the Strait of Hormuz.
The gains among energy stocks are a reversal to declines seen last week as the US and Iran entered a ceasefire ahead of peace talks.
Peace talks on Sunday (April 12), however, ended with no peace agreement to end the war.
Following the news, higher risk premiums in oil, gas and petrochemical prices are expected in the week ahead, CGS International Securities Singapore’s Raymond Yap said in a note on Sunday.
The US also announced it would implement a blockade of all maritime traffic entering and exiting Iranian ports on Monday.
Ahead of the planned move, Brent crude resumed its climb on Monday, currently up 7.89% at US$102.71 per barrel.