BIG Industries share price trajectory awaits breakout from pennant

by NUR HAZIQAH A MALEK / pic credit: ANNUAL REPORT

BIG Industries Bhd appears to be an early gainer from the “Sarawak thematic” with the company’s shares rallying despite no fundamental change in its business prospects.

BIG’s shares have risen from 69 sen on July 14 to hit a 16-year high of RM1.98 on July 23 before profit taking has seen the stock test a low of RM1.15 on July 27 with the higher volatility attracting increased volumes.

“The stock has since started to trade in a range, with the spread between the trading day highs and lows narrowing and forming a pennant. Now we have to see which way is the breakout,” a chartist with a local brokerage told The Malaysian Reserve.

The stock’s 52 low is 28 sen. BIG closed the trading week at RM1.55, giving it a market capitalisation of RM82 million.

“There is no fundamental change in BIG’s financials to reflect the sharp share price jump and it’s difficult to call it a ‘Sarawak’ thematic because the other state-based companies like Cahya Mata Sarawak Bhd are in the doldrums. If anything, the Movement Control Order would likely mean the quarterly performance will be weaker,” said the chartist.

He added that BIG’s 52.9 million shares outstanding make it easier to corner the stock and push it higher.

Quarter on quarter, BIG earnings fell 98% to RM11,000 for its third quarter ended March 1, 2021. The company was loss in calendar year 2020.

State elections in Sarawak are meant to take place in the next two months barring a health issue caused by the Covid-19 pandemic.

Earlier reports and social media posting state the rally in BIG’s share price was due to investors chasing up the Bintulu based industrial gas producer for its oxygen supply business that could see strong demand due to the high Covid-19 cases.

According to its recent exchange filing, there are no updates or announcements from the company nor an unusual market activity notice from the exchange.

Its latest announcements were in relation to the changes in the boardroom, remuneration committee and risk committee, nomination committee and audit committee on July 1.

BIG currently manufactures, distributes and markets industrial gases in Peninsular Malaysia, Sabah and Sarawak, while its other core activities include ready-mixed concrete and property.

The Health Minister Datuk Seri Dr Adham Baba has recently said during a press conference that there is no issue with the current existing oxygen supply to the healthcare sector despite the death rates among Covid-19 patients in both categories four and five.

He said the patients in category five needed oxygen therapy and hospitals are supplied with oxygen twice daily, hence, there are no issues with the supply.