The share prices of the Formosa Plastics Group's (FPG,????) four major subsidiaries did not react positively on Tuesday to strong 2016 earnings growth numbers released a day earlier.
Selling in the four stocks emerged as investors reacted to weakness in global oil markets, where international crude oil prices fell to a three-week low amid worries over an increase in production in the U.S., dealers said.
Formosa Plastics Corp. (??), the group's flagship entity, fell 0.78 percent to close at NT$89.50 (US$2.79), and Nan Ya Plastics Corp. (??) lost 0.95 percent to end at NT$73.10.
Formosa Chemicals & Fiber Corp. (??) dropped 1.65 percent to close at NT$95.60, and Formosa Petrochemical Corp. (???), a gasoline supplier, closed down 0.46 percent at NT$108.50.
The broader market was in consolidation mode, with many investors waiting for a news conference planned by U.S. President-elect Donald Trump for Wednesday in the United States, dealers said.
The weighted index on the Taiwan Stock Exchange edged up 0.08 percent at 9,349.64 on turnover of NT$59.82 billion.
The low trading volume made it hard for the Formosa Plastics Group stocks to gain momentum, and the fall in international crude oil prices overnight put further selling pressure on them throughout the session, dealers said.
Those negative factors were more important to investors than the strong earnings posted by the four major companies under the group's corporate umbrella in 2016, they said.
The four companies had combined net profits of NT$207.69 billion in 2016, up 46.8 percent from a year earlier, even though their consolidated sales fell 8.9 percent year-on-year to NT$1.32 trillion.
The group said the improvement in the four companies' bottom lines for 2016 largely reflected a rebound in international crude oil prices, in particular in the fourth quarter of the year.
Higher crude prices led to a hike in the prices for the petrochemical products provided by the four companies, the group said.
Formosa Plastics Corp. had a net profit of NT$39.2 billion in 2016, up 27.1 percent from a year earlier, with earnings per share at NT$6.17, while Nan Ya Plastics posted a net profit of NT$48.8 billion, up 36.6 percent year-on-year, with EPS of NT$6.15.
Formosa Chemicals & Fiber had a net profit of NT$43.88 billion, up 59 percent year-on-year, with EPS of NT$7.51, and Formosa Petrochemical had a net profit of NT$75.75 billion, up 60 percent year-on-year, with EPS of NT$7.95.
Formosa Plastics Corp. said it has decided to give out year-end bonuses equal to six months of salary because of its high profit growth, and it was cautiously optimistic about 2017 as long as crude oil prices remain relatively stable between US$50 and US$55 per barrel. (Bu Wei Shu and Frances Huang)
Source: Focus Taiwan News Channel