DUBAI Jan 11 A further decline in oil prices to
their lowest level in nearly a month may cause further selling
of Gulf petrochemical shares on Wednesday, with Saudi Arabia's
equities index testing technical support.
Brent crude futures fell 2 percent on Tuesday,
extending the previous session's sell-off, because of doubts
over producers' plans to cut output.
Petrochemical makers, which make up roughly one-quarter of
Saudi Arabia's market, were the main drag there on Tuesday. The
index, last at 7,008 points, looks set to test technical
support on its mid-December low of 7,002 points.
However, as Saudi earnings reporting season begins, some
petrochemical producers are likely to be favoured over others.
Santhosh Balakrishnan, senior analyst at Riyad Capital, said
Sahara Petrochemical for example had strong key
partnerships with global and regional producers allowing it to
benefit from cost synergies.
Shares in Yanbu National Petrochemical Co
(Yansab), a subsidiary of Saudi Basic Industries Corp,
may outperform its peers on Wednesday after reporting a 53.4
percent rise in fourth-quarter net profit to 602.85 million
riyals ($160.7 million), in line with analysts' forecasts.
United Arab Emirates markets may continue to outperform the
region on Wednesday because the UAE economy is less dependent on
(Reporting by Celine Aswad; Editing by Andrew Torchia)