Financial Daily from THE HINDU group of publications
Tuesday, Apr 02, 2002
Oil stocks up on APM dismantling
MUMBAI, April 1
THE dismantling of the APM for petroleum products from today had a positive impact on the petroleum companies' shares price. Almost all the petroleum majors closed higher today.
Major gainers of the day included ONGC, HPCL, IOC, Kochi Refinery, Chennai Petroleum. Shares of other companies such as Mangalore Refineries, Reliance Petroleum and BPCL also increased in today's trading.
Analysts said with the dismantling of the APM, companies could fix the price of various petroleum products based on market demand and supply. This is expected to boost marketing margins for the refining and marketing majors.
Speaking to Business Line, Mr Arun Kejriwal of KRIS Research said, "APM is expected to have a positive impact, but the rise in the oil companies (especially PSUs) share prices is because of the disinvestment in PSUs."
According to him, shares were in the limelight on account of a rise in the international crude prices in the last few days.
Sectoral decontrol has also ensured that ONGC can now sell crude at international parity. This is expected to boost the crude major's profits despite a crude cess of Rs 1,800 per tonne.
Brent crude prices touched a high of $25.85 per barrel, during the day. This could be considered positive if the Government decides to lower duties on crude and petroleum products in accordance with its earlier announcement.
On the BSE, ONGC ended 20 per cent higher at Rs 328, Chennai Petro at Rs 39.60 (up 17.51 per cent), IOC at Rs 226.70 (up 13.32 per cent), Kochi Refineries at Rs 60.50 (up 9.11 per cent), Reliance Petroleum at Rs 26.50 (up 2.51 per cent), MRPL at Rs 7.50 (up 10.29 per cent) and BPCL at Rs 312.65 (up 7.59 per cent).
Other than APM, the disinvestment in BPCL and HPCL in the current year has also led increased buying interest.
"Market players are seeing the valuation similar to IBP's during the disinvestment of Government stake," said a dealer.
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