Sinopec drops 11.6pc in bruising week
Shares of China Petroleum & Chemical Corp (Sinopec) dropped yesterday to the lowest in almost a year as rising crude oil prices threatened to eat into its earnings.
Asia's largest oil refiner fell 4.57 per cent to HK$6.68 to round out an 11.64 per cent decline this week in Hong Kong. Its Shanghai-traded stock dipped 3.07 per cent to 13.90 yuan.
The price of crude oil has soared in the past month and hit US$111 on Thursday amid a weakening US currency and volatile equity markets. Investors have steered clear of Sinopec as rising crude prices will increase its costs and put pressure on its profit margins.
The refiner has dropped 43.29 per cent this year in Hong Kong, the worst blue-chip performer. In Shanghai, Sinopec is down 40.67 per cent.
But rising crude prices could not spare oil producers during this week's slide in equity markets as PetroChina, the mainland's largest producer, skidded 4.18 per cent.
'Commodities have become so expensive, but the commodities stocks have been falling like a rock,' Fulbright Securities general manager Francis Lun Sheung-nim said.