Asia petchem stocks fall on doubts over economic recovery

30 March 2009 11:40  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian petrochemical stocks fell on Monday, tracking declines in regional markets, as investors were wracked by doubt that recovery will occur soon amid the flow of dismal economic and earnings data.

Hong Kong’s benchmark Hang Seng index logged its biggest single-day decline in three weeks, plunging 4.7% to close at 13,456.33 points.

China’s petrochemicals giant Sinopec reported a 47.3% plunge in its 2008 net profits but was upbeat on its prospects this quarter as crude prices have become relatively stable.

Sinopec, which is listed in Hong Kong, fell 5.82% on Monday.

Sinopec subsidiary Shanghai Petrochemical slumped 10.33% after it said it had swung into net losses of yuan (CNY) 6.24bn ($913.6m) in 2008 from a net profit of CNY1.63bn in 2007.

Japan’s petrochemical majors also declined, with Asahi Kasei down 5.14%, Mitsubishi Chemical falling 3.31% and Mitsui Chemicals 5.0% lower as the benchmark Nikkei 225 declined 4.53% to 8,236.08.

Japan's automobile production in February plunged 56.2% year on year to 481,396 units as the purchasing power of consumers had been sharply eroded amid the global economic turbulence.

US car manufacturers GM and Chrysler, which are facing mounting financial problems due to the collapse in global automobile demand, suffered another blow when the US government rejected their proposed reform plans.

Hopes of an imminent US recovery helped global markets to rally in recent weeks and allowed oil prices to break above $50/bbl, which the petrochemical industry welcomed.

Most petrochemical products tracked crude’s price movement, although analysts were wary that prices would not be able to sustain their upward trajectory without the recovery of demand.

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By: Pearl Bantillo
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