StockNews - CAO to be relisted on 29th Mar 2006

China Aviation Oil, which in 2004 announced a S$500 million loss due to trading in oil derivatives, leading to one of Singapore's largest financial scandals and landing its CEO in 4 years of jail term will resume trading tomorrow with institutional investors like BP and Temasek taking up increased stakes in the company at S$0.51 per share. Thus the share is likely to resume trading in a similar price range compared to its highs of S$2.00 in early 2004 and last traded price of S$0.965. The successful re-listing of CAO will most probably bring good sentiments in the market.

The guide to trading in this company now is to look at it from a wholly fresh perspective. Treat it as a new IPO company and consider it the potential of the company. Most probably in the short term, the company would still bring in the profits associated with the sale of aviation fuel to China's passenger planes. However, whether CAO remains as the sole provider of such services would depends on the Chinese government as they might consider granting another such licence in the light of the CAO scandal which could disrupt supply of aviation fuel.