KUALA LUMPUR (June 27): Shares of Hengyuan Refining Co Bhd rose on Monday (June 27) in line with the positive broader market sentiment, expectations of higher oil consumption and improved profit margins.

Hengyuan closed 35 sen or 7.74% higher at RM4.87 on volume of 2.61 million shares, much higher than the 200-day average volume of 1.4 million.

The stock has rebounded 12.21% from last Monday's low of RM4.34. At the current price, the company is valued at RM1.46 billion.

When contacted, MIDF Research analyst Imran Yassin Yusof said the general market sentiment was positive on Monday, which gave a boost to oil and gas stocks. "It could also be some bargain hunting activities," he added.

Bursa Malaysia's Energy index rose 1.65% or 11.17 points to 688.66 to emerge as second biggest gainer after the Technology index, which was up 2.83% or 1.77 points to 64.39.

Thong Pak Leng, vice-president of equity research at Rakuten Trade Sdn Bhd, said high crude oil prices amid the Russia-Ukraine conflict is one of the factors driving up Hengyuan's share price.

He advised investors to be cautious amid uncertainty with regard to the conflict.

"If the war is ending soon, then oil prices may fall. If it continues then oil price will remain high," he said.

At the time of writing, the Brent Crude oil price stood at US$112.96 per barrel, while US West Texas Intermediate (WTI) crude stood at US$107.30. Year to date, Brent has gained 45.23% or US$35.18 per barrel from US$77.78 at end-2021, while WTI has risen 42.67% from US$75.21.

Reuters reported on Monday that investors were waiting for possible steps against Russian oil and gas exports that could result from the Group of Seven (G7) summit in Germany.

"The prospect of [an] even tighter supplier loomed over the market as Western governments sought ways to cut Russia's ability to fund its war in Ukraine, even though G7 leaders were also expected to discuss a revival of the Iran nuclear deal, which might lead to more Iranian exports," the report said.