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FPG stocks remain resilient despite Vietnam steel accident

FPG stocks remain resilient despite Vietnam steel accident

Taipei, March 26 (CNA) Shares of four major firms under Formosa Plastics Group (FPG, ????) appeared resilient Thursday morning on the local main board despite a scaffolding collapse in the group's steel mill located in central Vietnam that reportedly killed at least 14 people, dealers said. The four FPG major subsidiaries -- Formosa Plastics Corp. (??), Nan Ya Plastics Corp. (??), Formosa Chemicals & Fiber Corp. (??) and Formosa Petrochemical Corp. (???) -- bucked a downturn on the broader market, which was hit by a dive on Wall Street overnight, as foreign institutional investors were believed to be standing on the buy side, the dealers said. According to the Vietnamese media report, at least 14 people were killed and 30 injured in a scaffolding collapse in a steel complex that has FPG investment. The reports said the accident occurred in the FPG steel plant located in the Vung Ang Economic Zone in Ha Tinh Province, central Vietnam, at around 8 p.m. the previous day when workers were building the scaffolding, which stood 30-40 meters high. As of 12:15 p.m., shares of Formosa had added 1.22 percent to NT$74.90 (US$2.39), shares of Nan Ya had gained 1.47 percent to NT$68.90, shares of Formosa Chemicals had risen 1.00 percent to NT$70.70 and shares of Formosa Petrochemical had climbed 1.48 percent to NT$68.40. Led by the FPG stocks, the petrochemical sub-index was up 1.06 percent at 223.35 points, while the weighted index on the Taiwan Stock Exchange was down 0.69 percent at 9,600.78 points. "I guess that FPG has bought insurance for the scaffold construction. I do not think the accident will have an adverse financial impact on the group," MasterLink Securities analyst Tom Tang said. "The four stocks have been favorites among foreign institutional investors. Today's selling in the local bourse focused on the bellwether electronics sector, so foreign investors rushed to pick up old-economy blue chips, like Formosa," Tang said. According to Tang, foreign institutional investors have bought a net 66.47 million Formosa shares, a net 84.15 million Nan Ya shares, a net 15.21 million Formosa Chemicals shares and a net 817,000 Formosa Petrochemical shares since mid-December 2014 despite a plunge of international crude oil prices. "Buying in these market heavyweights in the old-economy sector resulted from ample liquidity after several central banks around the world continued to pump funds into the market," Tang said. "Foreign investors simply used these old-economy blue chips to cushion the heavy losses suffered by electronics heavyweights and prevented the weighted index from falling further at a time when they still own long position contracts in the futures market," Tang said. Bucking the upturn of the four FPG stocks, Taiwan Semiconductor Manufacturing Co. (???), the most heavily weighted stock in the local market, led the broader market to trend lower, down 2.98 percent at NT$146.50. (By Pan Chi-I and Frances Huang)


Updated : 2021-09-16 22:58 GMT+08:00