PetroChina Bulls Swamp Options Market With Calls At 2010 High
By Kana Nishizawa
(Bloomberg) — It?s about time China?s biggest energy producer got some good news, the options market is signaling.
As PetroChina Co. shares traded 27 percent below a September peak through yesterday in Hong Kong, the cost of bullish options bets climbed to a five-year high, data compiled by Bloomberg show. The Beijing-based company?s stock has slumped as a global supply glut dragged crude oil to prices not seen since 2009.
Investors will shrug off a drop in PetroChina?s 2014 earnings spurred by the commodity rout, focusing instead on cost-cutting plans and the outlook for reform of China?s state-owned enterprises, according to Nomura Holdings Inc. For Pictet Asset Management Ltd., PetroChina call options are a cheap way to bet on an oil rebound.
?The earnings drop is expected, so I don?t think it?s going to spook the market,? said Gordon Kwan, Hong Kong-based head of regional oil and gas research at Nomura. ?On the other hand, the market is anticipating some good news in terms of how their new capex strategy could deliver higher returns. People are looking forward rather than focusing on backward-looking results.?
PetroChina?s net income will decline 14 percent in the 12 months ended Dec. 31 from a year earlier, according to the average of 16 analyst estimates. The company is due to publish its results on March 25. It may reduce its capital-expenditure budget by a double-digit percentage, the Wall Street Journal reported last month, citing people briefed by the company.
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