Petronas Chemicals sees RM2b erased from market cap

KUALA LUMPUR: Petronas Chemicals Group Bhd saw some RM2 billion erased from its market capitalisation at late morning on Tuesday, Sept 20, but traders said this was possibly due to foreign funds selling down its shares.

At 11.30am, the stock fell 25 sen to RM5.80 with 19.26 million shares traded.

A trader said that fundamentally, Petronas Chemicals was sound and that the price retracement was more to do with negative market movement.

'There is no reason to sell down the shares at the moment; a strengthening ringgit would improve its earnings and there are also not indications of a slowdown in demand,' he said.

CIMB Research has Buy on Petronas Chemicals at RM7.02

KUALA LUMPUR: CIMB Equities Research has a Buy on Petronas Chemical Group at RM7.02 at which it is trading at a FY12 price-to-earnings of 18 times and price-to-book of 2.9 times.

It said on Tuesday, June 21 that PetChem appears to have formed a consolidation triangle after hitting a high of RM7.61 in April. The sideways movement seen on its moving averages supports the triangle view.

The MACD continue to swing between the positive and negative territory, in line with the sideways movement in price. The RSI is also holding above the 40-pts mark, which could be viewed as base building.

"We think that bulls could soon dominate trading again once prices breakout of its triangle resistance at RM7.22. The stock is a buy now with a stop placed below RM6.96. A breakout above RM7.22 would likely send prices shooting towards the RM7.61 high with a small chance to reaching RM7.90-RM8 next," it said.