KUALA LUMPUR (July 11): Borneo Oil Bhd, which saw a sharp rise in the trading volume of its shares in the past two days, pointed to its improved first quarter performance in the three months ended April 30, 2016 (1QFY17) and the recent rally in the prices of gold globally following the Brexit vote as possible reasons behind the unusual market activity (UMA).

In its 1QFY17, it reported a net profit of RM10.7 million, more than 20 times its 1QFY16 net profit of RM525,000, thanks to improved performances from both its fast food and franchise, and mining, energy and related divisions, as well as its property, management and operation division.

Its mining, energy and related activities are undertaken by Borneo Oil & Gas Corporation Sdn Bhd. Apart from limestone and energy related activities currently being carried out, its other operations are in gold mining and investments.

Other than the above, it said in its reply to the UMA query issued by Bursa Malaysia earlier today that it was unaware of any corporate developments, rumour or report that could have led to the sharp rise in the trading volume of its shares.

In another filing, Borneo Oil said it has also taken advantage of investing in gold for the past year in the belief that low gold prices are temporary as it was trading below the industry mining and production costs. It said the investment has proven correct as gold prices have increased substantially due to many uncertainties in the financial markets.

The substantial jump in revenue in its 1QFY17 — from RM14.63 million a year ago to RM1.49 billion — was also due to the sale of gold investments.

On Friday (July 8), Borneo Oil's share price rose 8.82% to 18.5 sen from 17 sen in its previous close, after 162.6 million shares were traded.

Though its share price rose as much as 5.4% to an intra-day high of 19.5 sen today, it settled unchanged at 18.5 sen the end of the trading hours after 154.5 million shares changed hands.

In comparison, Borneo Oil's 200-day average volume is only 19.3 million.