SapuraKencana jumps 2.61% on resuming Shariah stock status, oil prices recovery

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KUALA LUMPUR (Apr 17): Sapurakencana Petroleum Bhd rose as much as 7 sen or 2.61% to RM2.75 as it is set to return to the Securities Commission (SC)'s list of Shariah-compliant securities in May and due to the rebound in oil prices.

As at 10.31am, the stock was traded at RM2.72, up  4 sen or 1.49% with 6.37 million shares done between RM2.70 and RM2.75.

With the current price, Sapurakencana (fundamental: 1.30; valuation: 1.40) has a market capitalisation of RM16.059 billion.

The counter has been on the decline over the past 10 months, which saw its share price dip to a low of RM2.08 on Dec 15 last year from a high of RM4.40 on June 20 last year, before regaining its position to current level.

In a note to client today, CIMB Research said Sapurakencana is set to return to the SC list of Shariah-compliant securities in the May this year.

"We are encouraged that management has taken the initiative to meet the SC's requirement for Shariah compliance. We understand that the audited accounts have been submitted to the SC.

"The next step is an approval from the SC's Shariah council. The SC's latest Shariah-compliant securities list will be released on May 29," it said.

To recap, SapuraKencana was removed from the SC's Shariah-compliant securities list in the Nov 2014 review.

Meanwhile, oil prices, which jumped to fresh 2015 peaks on Thursday amid the news that a tribal group took control of a major southern oil terminal in Yemen, also contributed to the rise in share prices.

The Brent crude for June delivery rose 66 cents to settle at $63.98 a barrel, rallying from a $62.00 low and reaching a 2015 peak for front-month Brent of $64.95.

While U.S. May crude rose 32 cents to settle at $56.71, hitting a 2015 high of $57.42 after recovering from a $55.07 intraday low.

At the time of writing, Brent crude was down 1.02% at US$63.33 per barrel while US crude was down 0.92% at US$56.19 per barrel.

In a technical analysis today, Kenanga Investment Bank believed that Sapurakencana's share price will consolidate for now since both Stochastics and Relative Strength Index (RSI) has started to wane in their respective overbought region.

"Historically, the share price would consolidate each time the Stochastic had reached Overbought levels. Thus, we recommend traders to wait for share price to retrace back to RM2.54 before entering the stock," it added.  

"Chart wise, the share price has convincingly broken out from its multi-month downtrend resistance. There appears to be a 'Gravestone Doji' formed on yesterday's trading session, signifying a slight bearish trend," the firm said.

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)