Shares of MISC Bhd were up by 1.53% as disruptions in the global shipping industry caused oil shipping rates to soar, posing earnings opportunity for the company.
At 12pm the counter rose 12 sen to RM7.96, with 3.44 million shares traded.
Reuters said oil shipping rates are soaring following a series of sanctions on a Chinese transportation giant and limitations placed on movement of Venezuelan crude oil tankers.
“The United States in late September imposed sanctions on two units of China’s COSCO for their alleged involvement in bringing crude oil from Iran. US Gulf Coast exporters, in turn, have held back from chartering COSCO-linked vessels. COSCO operates more than 50 supertankers, the largest vessels for carrying crude oil or fuel products.
“Last week, Exxon Mobil Corp banned the use of vessels linked to oil flows from Venezuela in the last year, affecting some 250 ships. Exxon is the largest US oil company and a major shipper, and its move caused rates to rise further, market sources have said,” the newswire said.
An oil and gas analyst who declined to be named said investors are likely to take cue as higher shipping rates would translate into better earnings for MISC.
Citing geopolitical factors, the analyst said the flow of the shipping route will likely affect the supply chain, raising prices. “Rates generally rise nearer to winter time too as shipping companies prefer not to transport during cold weather,” he added.
Source: The Edge Market
