KUALA LUMPUR (June 15): PETRONAS Chemicals Group Bhd (KL:PCHEM) retreated to a three-month low as investors booked profits following news of the US-Iran peace deal.

The fall, which erased nearly RM7 billion off its market capitalisation, mirrored the decline in the energy sector on Monday as oil prices tumbled with the US and Iran agreeing to an “immediate and permanent” end to the war that started more than three months ago.

Shares of the petrochemical company fell as much as 83 sen or nearly 16% to RM4.51, its lowest since March 11. PETRONAS Chemicals ended at RM4.52 after more than 48 million shares changed hands.

“The prospect of a resolution of the conflict between Iran and US has led to profit taking of commodities related counters,” said Imran Yassin Yusof, head of research at MBSB Research.

He has a “buy” call on PETRONAS Chemicals with a target price of RM6.60.

The company, which manufactures olefins, polymers, fertilisers, methanol and specialty chemicals, was valued at RM36 billion based on the last price.

The stock is still up 52% since the outbreak of the Iran war at the end of February.

A spike in product prices in the wake of geopolitical conflict in the Middle East has contributed to the turnaround of PETRONAS Chemicals, which previously grappled with a supply glut in the petrochemical industry and weak demand.

The Bursa Malaysia Energy Index, which also tracks 32 oil and gas stocks as well as renewable energy firms, saw more than half of its constituents in the red at the end of the trading session.

While the US and Iran have reached an interim agreement to reopen the Strait of Hormuz and halt their conflict, details are still scarce, with both sides set to iron out terms over 60 days of negotiations. Brent, the global benchmark of crude oil, still was down more than 5% or below US$83 following the news.