Bangkok--14 Jun--Moody's Investors Service Moody's Investors Service has a stable rating outlook on the Asian petrochemicals sector, although business risks differ within the industry, and depending on each company's individual product portfolio, markets served, feedstock positions and product cycles. Fluctuating crude oil prices over the past year have squeezed margins and lowered operating cash flows at some companies, particularly those facing relatively weak markets or unable to pass cost increases through to consumers, Moody's says in a report released today. The report examines the outlook for ratings and the impact of market conditions, expansion plans and liquidity management practices on the sector in Asia, excluding Japan. Authored by Alan Greene, a Senior Vice President at Moody's, the report is part of Moody's Industry Snapshot series, which offers succinct and incisive looks at particular sectors. Moody's rates four petrochemicals companies in Asia (ex Japan) and three are rated investment grade. "Over the past year, Asia's petrochemicals companies reported slightly higher margins than expected, and leverages remain at acceptable levels, or have shown improvement," says Greene. "In addition, regional economic fundamentals are expected to stay strong, supporting demand for petrochemicals products over next 12-18 months," Greene says, adding, "capacity expansion should be largely balanced by demand growth, providing generally stable conditions." "The consolidation trend within the sector should continue, providing greater competitive advantages in managing cycles, but raising both event and execution risks," Greene adds. At the same time, the report sees substantial new capacity (mainly from Asia and the Middle East) commencing operation during 2008-2010, and production may subsequently surpass demand growth and lead to market downturns. The report, "Outlook Stable Despite Challenging Market Conditions," can be found at www.moodys.com Singapore Alan Greene Senior Vice President Corporate Finance Group Moody's Singapore Pte Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (65) 6398-8308 Singapore Nancy Koh Vice President - Senior Analyst Corporate Finance Group Moody's Singapore Pte Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (65) 6398-8308