War boosts energy stocks

Press, 6 October 1980, Page 22

War boosts energy stocks

Oil company shares rose sharply on world stock; markets last week because! of a growing belief that the; Iran-Iraq war will end a world glut of oil.

Investors have shown increasing enthusiasm for companies with oil, gas, or coal reserves, or those involved in exploration for new fields, because it looks as though this war might last longer than originally expected.

An end to the five-month-olp glut, during which world oil stocks have grown to record levels, would be likely to give a new boost to energy company profits. The fighting has already stopped Iranian and Iraqi, exports, almost 6 per cent!

; or normal world consumption. The Australian ; sharemarket was no exception, and here the energy sector was given an additional boost at week’s end with news that Australia’s [first coal-oil liquefaction i plant would be built in Queensland. The announcement came after the signing of the formal go-ahead agreement for the .$5,000M North West Shelf gas project, and Woodside's tie-up of a SI3OOM loan for its part in the project.

Woodside finished the week 12c ahead at 330 c to lead the oils, and, Peko, a I principal in the coal-to-oil scheme, put on 50c to SI2IO, lin a generally lethargic mining sector.

Apart from the energy sector trading on Australian stock exchanges took on a hesitant twinge as the Federal election campaign moved into full stride last week, although over-all trading continued also to be underpinned by demand for gold stocks. Gold stocks, although under pressure from falling gold prices at week’s end, continued to hold up despite the dampening effect of higher United States prime rates.

Among the major golds, Emperor rose 50c to 530 c, Central Norseman was 10c off at $12.30, G.M.K. held at $ll.OO, and Poseidon shed 60c to 650 c.

Elsewhere, strong silver prices and sustained U.S. buying helped M.I.M rise 47c to 522 c but several other big stocks tended to lag, including C.R.A which was steady at 656 c, Western Mining, which lost 14c to 580 c, Bougainville, down 12c at 248 c and Hamersley, which gave up 10c to 430 c.

Industrials continued to drift, in anticipation of higher interest rates after the Federal election. However, strong demand [for B.H.P, which has interjests both in gold mining and the North West Shelf gas I project, saw the stock finish 'at a 10-year high of $16.15,

after a 45c rise on the week. The stock’s 20c rise on Friday allowed the Sydney all-ordinaries index to finish at a record 997.50, a 1.93 point improvement on the previous mark set on September 25. Polls showing a close race in the Federal election campaign made for mixed trading in the uranium sector, but cite news didn’t bother : Pancontinental which added 80c to 850 c.

The group’s long-awaited oil float, Pancontinental Petroleum, finished its first day on the boards at 48c, almost double the issue price of 25c, but profit-takers • eased the price to 45c on Friday. The Transport group, T.N.T, and Pioneer Concrete were among the few companies to provide big profit results as the reporting season drew to a close. T.N.T. added 3c to 265 c after turning in 72 per cent profit improvement to $40.2M, and Pioneer Concrete fell 10c to 220 c after reporting an above-target profit gain to 532.2 M for the year. Stocks listed in the exchange’s non-mining index eased 0.02 per cent on the week.. j

The Sydney metals and minerals index added 63.67 points to 6665.52, a 0.96 per cent improvement. I