22 January 2008 05:32 [Source: ICIS news]
While fundamentals for some Asian petrochemical companies were still strong, the
“It will take a quarter or two to confirm weak demand will occur. This could be a very big risk,” Thomas Yi, analyst from Samsung Securities, said.
Weak demand could become another burden for the petrochemical industry which was already weighed down by high crude oil costs, he said.
However, crude oil prices were expected to stabilise at $80/bbl because of the overall weak market conditions, he added.
Shares of South Korean petrochemical firms posted the sharpest fall of 4-12%, lower than the 4.2% decline at the Korea Composite Stock Price Index (KOSPI).
Companies with high petrochemical exposure such as Honam saw its shares plunged 12% to won (W) 77,200 ($81.4) by mid-day. SK Energy also fell 7.5% to W116,500 on expectations of a poor fourth-quarter result, Yi said, adding that its share price plunged over 40% in the past three months.
LG Chem, which saw a 7% fall in its share price to W68,800, would be cushioned by new output at its information and electronics business, Yi said.
Taiwanese stocks under the Formosa Plastics Group were down 5-7% by mid-day, in line with a 6.5% fall at the Taiex index.
The direct exposure to the
“We [are] worried to see stocks falling. But [company] earnings, we are optimistic,”
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