Refinery-Petrochem Stocks in Bad Shape, Tormenting by Small Spread, Low GRM, Stock Loss!

Mr. Chaiyot Jiwangkul, assistant director of the analytic department of Krungsri Securities, has stated in “Kaohoon Jor Talad” program through SMM Spot Radio FM 56 MHz, Facebook and YouTube like that the first quarter in 2020 is still a critical point for oil refinery-related and petrochemical stocks.

 

The movement in a positive direction in today’s session is a short rebound following other markets after China has issued a stimulus plan while the Thai stock market still lacks positive domestic factors to support the index.

However, the market is at risk of a selloff for profit taking if it reaches 1,530 points. On the other hand, the index would have a longer run if it breaks the resistance level at 1,545 points.

Moreover, Mr. Chiyot says that the energy sector remains the one to pressure the market due to a constant decrease of crude oil prices, but the OPEC meeting to cut oil production could hike the prices. Thus, Mr. Chiyot suggests “accumulative buy” on weakness for stocks in the energy sector, but need to be cautious of speculation.

As for the refinery-related and petrochemical stocks, Mr. Chiyot sees that the operation in 1Q20 will edge lower when compared to 4Q19 due to lower gross refinery margin and small petrochem spread.

Furthermore, the refinery-related and petrochemical stocks could face a stock loss from lower oil prices in 4Q19 from 60 dollars/barrel, previously to 50 dollars/barrel, currently.