13/4/06 PETALING JAYA (The Star)  -  Carotech Bhd's share price surged to a record yesterday as investors interpreted rising crude oil prices as likely to fuel fresh demand for biodiesel.

“The stock valuation is pricey at the moment, but investors were buying on its future prospects,'' a local fund manager said.

“The company is in the right business at the right time,'' he added.

At the close, Carotech's share price was up 10 sen, or 14%, to 81 sen on volume of 2.07 million shares.

Listed last year, Carotech has a proven track record for extracting and processing palm oil nutrients to manufacture pharmaceutical and biodiesel products.

Two months ago, the company sealed a contract to supply its own high quality “CaroDiesel” to a large Japanese client. The fuel would be used to power cars on the road.

Analysts said the contract was expected to take up Carotech's entire production capacity at its second plant and half of its even bigger third plant, which was yet to be completed. 

Elsewhere, shares in Shell Refining Co (FOM) Bhd also traded higher yesterday, as crude oil prices rose to above US$69 per barrel.

“The outlook for the refining sector is positive, as regional discrepancies in demand-supply will keep margins relatively stable,'' SBB Securities said yesterday.

Shell's share price ended 20 sen higher at RM10.90 - the highest since last October.