PetroChina shares jump on NDRC gas rise rumors

Stock Market Predictions

HONG KONG (Global Markets) - Oil major PetroChina (0857.HK) posted its biggest intraday percentage gain in eight months on Friday, surging more than 5 percent in Hong Kong on rumors that China may announce a natural gas price rise and a broker upgrade.

PetroChina (601857.SS), the country's largest oil and gas producer, has nearly half of its reserves in natural gas.

Analysts said the market was speculating that the National Development and Reform Commission may announce another domestic natural gas price hike, a move made more imminent by the collapse of talks between Russia and China to resolve an elusive 30-year gas supply deal on Friday.

"A much needed natural gas price hike would help PetroChina minimize the economic loss of importing expensive overseas gas," said Gordon Kwan, an analyst at Mirae Asset Securities in Hong Kong.

Merrill Lynch upgraded the Hong Kong listed stock to buy from neutral on Thursday, saying that PetroChina's parent CNPC may inject its oil assets in Sudan into the listed company.

Other analysts were more dubious on the Sudan asset injection happening in the near term given ongoing disputes between the country's Muslim North and Christian South over profit sharing.

PetroChina's shares were up 3.4 percent by 0715 GMT, strongly outperforming the benchmark Hang Seng Index's .HSI 0.9 percent drop.

(Reporting by Farah Master; Editing by Jonathan Hopfner)