Why Petronas Chemicals is Soaring to New Highs

Maybank IB Research Analyst Mohshin Aziz discussed the basis for his target price of RM8 for this stock, which falls between the low of RM5.70 target price by another research house and high of RM10 target price by CIMB Research. He also talked about the generous margins in this industry, and how PetChem and other petrochemical players are stepping in due to supply shortfall as a result of Japan's earthquake. Japan is a major petrochemical producer in the region and contributes an estimated 7.5% of Asia's total supply. He views the recent BASF plant announcement as a red herring; minimal impact on PetChem's share price as it has been mentioned in its prospectus previously. Petronas Chemicals Group’s share price has been climbing steadily since March 15th, hitting a 52-week high on Wednesday at RM7.22. CIMB Research had raised Pet Chem’s target price for the stock from RM7.25 to RM10 on Monday. See omnystudio.com/listener for privacy information.