Mena petchem sector ‘attractive despite unrest’
Tokyo, March 31, 2011
Nomura sees the petrochemical sector in the Mena region an attractive one despite political unrest, due to higher prices, export demand and plant utilisation.
The brokerage said it prefers speciality petrochemical companies like Saudi Basic Industries Corp -- the world's biggest chemicals group by market value -- and Saudi International Petrochemical Co as most of their output is exported.
Saudi Arabia is increasing oil production to offset Libya's supply disruption, the brokerage said, adding, "higher oil production from Saudi Arabia means increased associated gas, which supports the petrochemical sector.”
A major portion of Libya's oil production has been halted since protests began sweeping the Middle East in January.
Oil shipments from Africa's third-largest producer have been blocked for weeks due to heavy fighting and western sanctions on the Libyan government.
The brokerage expects Mena petrochemical companies to post strong quarterly earnings, with the level of profitability almost mirroring that of the second quarter of 2008. – TradeArabia News Service