It has been about a week since OPEC made the
decision not to cut oil production and sent the oil price on a free fall.
The first thing that relates to us may be the
lower fuel price. Being a commodity that almost every household depend on,
lower fuel price is giving a break to our wallets.
However, is it as simple as this? Is it as good
as it sounds? There are a hundred and one reasons for us to doubt so.
One of them being, you guessed it right - the
falling stock market. It did not happen for no reason, the market is reflecting the fact that a handful of public listed companies have their profitability undermined by the weak oil price.
The first three trading days in this week is
characterized by a steep fall on Monday, a slight rebound on Tuesday followed
by again by a decline on Wednesday.
Despite the rebound on Tuesday, there are still
11 oil and gas related counters losing at least 10% of the value as of the
closing price on Wednesday.
Counter
|
Code
|
Monday Open Price
|
Wednesday Closing Price
|
Loss
|
Loss in percentage
|
DAYANG
|
5141
|
RM2.850
|
RM2.500
|
RM0.350
|
12.28%
|
DELEUM
|
5132
|
RM1.800
|
RM1.540
|
RM0.260
|
14.44%
|
KNM
|
7164
|
RM0.550
|
RM0.455
|
RM0.095
|
17.27%
|
KUB
|
6874
|
RM0.495
|
RM0.435
|
RM0.060
|
12.12%
|
PERDANA
|
7108
|
RM1.250
|
RM1.040
|
RM0.210
|
16.80%
|
PERISAI
|
0047
|
RM0.650
|
RM0.505
|
RM0.145
|
22.31%
|
SKPETRO
|
5218
|
RM2.760
|
RM2.440
|
RM0.320
|
11.59%
|
TGOFFS
|
7228
|
RM0.370
|
RM0.330
|
RM0.040
|
10.81%
|
THHEAVY
|
7206
|
RM0.430
|
RM0.370
|
RM0.060
|
13.95%
|
UMWOG
|
5243
|
RM2.820
|
RM2.520
|
RM0.300
|
10.64%
|
UZMA
|
7250
|
RM2.140
|
RM1.800
|
RM0.340
|
15.89%
|
At the end of the day, the shareholders and the employees are facing the consequences of the diminishing profitability of the companies.
Even without job cuts, given the current situation, we can expect with a certain probability that the paycheck will be increasing at a much slower rate, maybe even lower than the rate of inflation. When this occurs, the purchasing power of the employees decreases, as a result.
So, is falling oil price a blessing or a curse? Of course we leave the judgment to you.
