Asian petrochemical shares, oil prices rise on H2 recovery hopes

SINGAPORE (ICIS)–Asian petrochemical shares and oil prices rose on Tuesday as more countries eased coronavirus restrictions, supporting investor hopes of a global recovery in the second half of the year.

At 03:20 GMT, Asahi Kasei Corp was up more than 5% in Tokyo, LG Chem surged almost 5% in Seoul and Chandra Asri Petrochemical rose by more than 2% in Jakarta.

Japan’s Nikkei 225 Index was 2.20% higher, Hong Kong’s Hang Seng Index was up by 1.84% and South Korea’s KOSPI Composite Index rose by 1.29%.

Company/Stock Exchange	% Change
Nikkei 225 (Tokyo)	2.20%
Asahi Kasei Corporation	5.06%
JXTG Holdings, Inc.	2.27%
Mitsubishi Chemical Holdings Corporation	2.55%
Mitsui Chemicals, Inc.	4.62%
Hang Seng Index (Hong Kong)	1.84%
Sinopec Shanghai Petrochemical Company Limited	1.57%
PetroChina Company Limited	1.54%
KOSPI Composite Index (Seoul)	1.29%
OCI Company Ltd	4.73%
SK Innovation Co., Ltd.	7.55%
LG Chem, Ltd.	5.78%
Lotte Chemical Corporation	1.90%
Hanwha Corporation	2.30%
TSEC weighted index (Taipei)	1.36%
Formosa Petrochemical Corporation	0.56%
Nan Ya Plastics Corporation	2.58%
Formosa Chemicals & Fibre Corporation	1.25%
STI Index (Singapore)	-0.84%
Wilmar International Limited	2.38%
Olam International Limited	1.35%
FTSE Bursa Malaysia KLCI (Kuala Lumpur)	-1.06%
SSE Composite Index (Shanghai)	0.66%
Jakarta Composite Index	1.42%
PT. Chandra Asri Petrochemical Tbk	2.17%

Japanese Prime Minister Shinzo Abe on Monday lifted the nationwide state of emergency as the number of coronavirus cases in the country eased.

Abe told a news conference that reviving the economy was now the top priority, and his government will decide on a second extra budget on 27 May to help people and businesses struggling from the pandemic.

Investor sentiment is supported by fresh signs that European economies are re-opening, with Spain announcing that it will stop enforcing mandatory quarantine for foreign tourists from 1 July while the UK said that it  will start to reopen some retail outlets from 1 June.

Equity market gains, however, were capped by renewed tensions between the US and China over Hong Kong.

Protestors took to the streets over the weekend in Hong Kong after China’s proposed on 22 May a national security legislation for the former British colony. The US warned that China’s move could lead to sanctions.

“US-China relations will very much be in focus after China’s proposed national security legislation covering Hong Kong sparked fears of a rise in tensions between the two biggest global economies,” Singapore-based UOB Global Economics & Markets Research said on Tuesday.

Overnight, the US and UK markets were closed for their respective Memorial Day and Spring bank holiday.

Oil prices tracked the positive sentiment in the equity markets on Tuesday amid signs that major producers are adhering to commitments to cut supply by almost 10m bbl/day for May and June.

$/bbl (As of 04:00 GMT)	Last Price	% Change	Net Change	Close	High	Low
July Brent	36	1.32%	0.47	35.53	36.01	35.53
July US WTI	34.2	2.86%	0.95	33.25	34.22	32.48

Oilfield services firm Baker Hughes reported that US drillers cut the number of oil rigs in operation in the week of 22 May, bringing down the total count to 318, the lowest count since 1940.

Focus article by Nurluqman Suratman

Photo: Commuters wearing face masks walk from Japan’s Shinagawa station to their offices, a day after the state of emergency was fully lifted in the country. 26 May 2020 (By Rodrigo Reyes Marin/ZUMA Wire/Shutterstock)

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