Why did East Energy Resources and Sagalio Energy rocket ~1000pc on no news?
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Price action was led by unusual trading activity across a number of sleepy stocks that had the word ‘energy’ in their name, all of which surged on no news before going into a trading halt or being suspended outright by the ASX.
East Energy Resources soared 1,100 per cent to 3.6c, while Sagalio Energy enjoyed a 975 per cent leap to 8.6c/share before the ASX started handing out speeding tickets.
The ASX has requested both companies explain the large moves.
$1.9m minnow Grand Gulf Energy (ASX:GGE) also joined the party, ripping higher by more than 200 per cent before it too went into a trading halt.
Investors on various forums were excited and confused by the large share price jumps for East Energy and Sagalio, and speculated feverishly over possible reasons.
Some investors suggested that both East Energy Resources and Sagalio Energy were buoyed by news of prime minister Scott Morrison’s new gas policy announcement on Tuesday.
“The Australian government is talking about a gas revolution with a new gas plant in NSW to replace the Liddel coal plant,” said Stockhead energy expert Peter Strachan.
Blue Energy (ASX:BLU), a gas company with an exploration portfolio in Queensland and the Northern Territory, moved sharply higher after Morrison said five Australian gas basins could be unlocked to supply east coast energy markets.
This could explain why neighbouring explorer East Energy’s share price gained — although the company actually has interests in thermal coal, not gas.
For Sagalio Energy, its share price move could be linked to fellow central Asia-based minnow Jupiter Energy’s (ASX:JPR) impressive share price rise over recent days.
The government of Kazakhstan has talked about changing its regulations to allow oil producers to sell direct to the global market at prevailing prices, said Strachan.
In its last report to the market on July 30, Sagalio Energy said it was continuing to produce oil from wells in the neighbouring central Asian republic of Kyrgyzstan.