Malaysia Energy Stocks Soar on Improved Middle East Outlook
Malaysia's energy stocks saw significant gains on Tuesday, reaching their highest level in three months. The Bursa Malaysia Energy Index rose by over 1% after a strong earnings season for several companies last week.
Hengyuan Refining Company Bhd (KL:HENGYUAN) led the pack with a staggering 30% increase, its maximum allowed daily rise. The company's stock hit RM2.53 with more than five million shares traded by noon.
The oil price outlook has improved due to renewed turmoil in the Middle East. Hong Leong Investment Bank warned that persistent disruption at the Strait of Hormuz could push oil prices back towards US$90 per barrel in the near term, with an average of US$80 this year as the base case.
PETRONAS is set to increase its capital expenditure for upstream activities next year, accompanied by energy security investments across the region. This news has kept the sector rating on 'overweight' at Hong Leong Investment Bank.