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IVL among major gainers as petrochem stocks rise (nationthailand.com)

IVL among major gainers as petrochem stocks rise

EconDec 04. 2020

By The Nation

The price of petrochemical stocks surged amid hopes of a Covid-19 vaccine, experts said.

On Thursday, the share price of Indorama Ventures Pcl (IVL) rose by 7.03 per cent, or Bt2.25, to Bt34.25 per share, Global Green Chemical Pcl (GGC) rose by 3.30 per cent, or Bt0.30, to Bt9.40 and PTT Global Chemical Pcl (PTTGC) rose by 2.64 per cent, or Bt1.50, to Bt58.25.

Kasikorn Securities senior analyst Jakapong Chawengsri said the price of petrochemical stocks often rose at the beginning of a global economic recovery.

Meanwhile, he said the rise in China’s purchasing managers’ index also reflects high petrochemical demand as China is the world’s largest petrochemical user.

“Therefore, the rise in petrochemical shares amid positive news of a Covid-19 vaccine pointed to signs of an economic recovery,” he said.

He added that investors were still able to buy petrochemical shares because its price was still lower than book value (BV) of one time.

“Before the Covid-19 era, petrochemical stocks were traded at a price higher than BV,” he added.

CGS CIMB Securities senior vice president of research Kitichan Sirisukarcha said the price of IVL shares had risen sharply as one foreign brokerage firm had adjusted its fair price to Bt38 per share, while its price did not increase much compared to other stocks in the group.

Also, he said IVL is expected to perform even better next year as it has gained positive sentiment from the difference in polyester product price.

“However, we advise investors to speculate on profit from IVL shares because its price has risen higher than our target price of Bt28.50 per share,” he said.