Thai petchem stocks gain on rosy Q1 results outlook

14 January 2010 05:59  [Source: ICIS news]

SINGAPORE (ICIS news)--Shares of petrochemical companies in Thailand gained Thursday on expectations of better first-quarter earnings on the back of rising product prices and improving demand.

At 13.32 hours Singapore time (0532 GMT), PTT rose 1.22%, PTT Chemical (PTTChem) was up 2.45%, PTT Aromatics (PTTAR) edged up 0.93% and Integrated Refinery & Petrochemical Complex (IRPC) gained 1.35%.

Thailand’s main bourse – the SET index – was up 4.85 points or 0.65% at 751.59.

“In the first quarter, there might be some surprise on the upside for petrochemical earnings,” said Suttichai Kumworachai, a Bangkok-based analyst at brokerage KGI Securities, citing wider overall spread on chemical products.

“There seems to be very surprising strong demand and the market is very tight due to [plant] shutdowns,” he said.

Fourth-quarter 2009 earnings for the companies may just be the same as the third quarter’s results if not softer due to weak spreads but investors have been looking past this judging from the strong share prices of petrochemical stocks, he said.

Issues about the stalled petrochemical projects of these companies in Mab Ta Phut, Rayong province were temporarily set aside.

Overall sentiment in the country’s equities market, meanwhile, has remained subdued and appetite for new listings may be muted in the first quarter.

Indorama Ventures, the parent of polyethylene terephthalate (PET) producer Indorama Polymers, has plans to do an initial public offering (IPO) of 931m shares at Thai baht (Bht) 10.20-12.60 each on the Thai bourse.

KGI Securities was projecting only a very limited upside to the benchmark stock index in the first three months of the year to 760 points, said Suttichai.

Topping the list of concerns in the country was its shaky politics, said the analyst.

Concerns about the strength of the global economic recovery and the timing of the withdrawal of fiscal and monetary support across economies, meanwhile, continued to hound the market, he said.

Sentiment and market conditions may get better in the second half as the global economic picture gets clearer, Suttichai said.

“For this year, we have a target of 850, which means we have a 15% upside for the SET index,” he added.

($1 = Bht33.03)

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By: Pearl Bantillo
+65 6780 4359

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