By: Mohamed Abou Meleeh

Riyadh – Mubasher: Shareholders of listed petrochemical stocks in the Gulf region and Egypt have endured a tough month as the sector suffered strong declines in August, particularly after the sharp declines in oil prices as well as news of economic crises in several parts of the world, especially China, the largest economy and a major market for the petrochemical sector.

In Saudi Arabia, of the 14 listed petrochemical firms, 12 depend on China as the main market for revenues.

Since July and till the end of the trading session on 23 August, a total of 25 companies operating in the petrochemical sector have suffered market losses amounting to $27.9 billion, representing 95.45% of these companies’ total capital of $29.3 billion, according to statistics by Mubasher.info.

These 25 firms are listed in Egypt, Saudi Arabia, Kuwait, Muscat and Qatar.

The negative performance seen by these stocks is not what traders have been used to as these firms often recorded the highest gains, especially in the Gulf.

Saudi firms recorded the biggest losses in the region, especially for the top companies in terms of market value including Saudi Basic Industries Corp. (SABIC), which suffered a market loss of SAR 58 billion ($15.5 billion), representing 194% of its SAR 30 billion ($8 billion) capital.

Saudi Arabian Fertiliser Co. (SAFCO) incurred market losses worth SAR 10.67 billion ($2.8 billion), representing 256% of the firm’s capital of SAR 4.2 billion ($1.1 billion), while Rabigh Refining and Petrochemical (Petro Rabigh) suffered SAR 6.4 billion ($1.7 billion) market losses, making up 73% of the firm’s market capital worth SAR 8.76 billion ($2.3 billion).

Only one company, namely Kafr El Zayat Pesticides, listed on the Egyptian Stock Exchange (EGX) registered a marginal increase of 0.4%, whereas stock declines varied between 30.4% for Petro Rabigh and 1.8% for Egyptian Financial and Industrial Co. (EFIC), the largest producer for phosphate fertiliser in Egypt.

OPEC data showed that oil prices slid 12.6% from $50.51 per barrel (pb) on 31 July to $44.13 pb on 20 August, while prices of petrochemical stocks plunged 16.6% on average, making the bigger decliners than the oil.

Translated by: Nada Adel Sobhi