Chemical stocks hit by Kaohsiung gas blasts
August 1, 2014, 1:53 pm TWN
Taipei -- Chemical stocks in Taiwan took a dive Friday after a series of gas explosions rocked Kaohsiung Thursday night, killing 25 people and injuring 267, dealers said.
Many investors stayed away from chemical stocks amid worries that the findings of the investigation into the blasts would affect chemical stocks, dealers said.
"Uncertainty over the cause of the incident spooked many investors and they began dumping chemical stocks as soon as the local bourse opened," Hua Nan Securities analyst Henry Miao said.
As of 12:59 p.m., shares of LCY Chemical Corp. had dropped 7 percent, the maximum daily decline, to NT$23.25 (US$0.78), with 6.33 million shares changing hands.
China Petrochemical Development Co., meanwhile, had lost 6.53 percent, falling to NT$11.45 on trading volume of 152.19 million shares.
Both companies currently operate in Kaohsiung.
The weighted index on the Taiwan Stock Exchange was down 0.52 percent at 9,267.85 points, while the petrochemical sub-index had dropped 1.13 percent to 228.64 points.
China Petrochemical said it had nothing to do with the explosion and that its operations in Kaohsiung remained normal. It said that in the interest of safety, however, it has gradually lowered the pressure in its propene pipelines.
LCY Chemical, meanwhile, said its pipelines in Kaohsiung were still functioning and it was not the one responsible for the explosion.
CPC Corp., a state-owned gasoline supplier that has production lines in Kaohsiung, also distanced itself from the disaster and said its operations in the southern city remained normal.
The incident is being investigated but Minister of Economic Affairs Chang Chia-juch said that a propene leak from an underground pipeline may have been the cause of the explosions.