Petrochemical companies are experiencing a dip in profits as the price of oil falls and the world economy cools, causing their stocks to underperform.
But still the industry is performing better than expected, and analysts expect producers to ride out the global slump and keep pumping out generous dividends.
The improved prospects come as companies such as Industries Qatar and Saudi Basic Industries Corporation, also known as Sabic, post lower profits, which nevertheless beat expectations.
"In medium to long term, we are positive on Mena [Middle East and North Africa] petrochemicals but cautious in the near term on relatively uncertain macro, especially in China and [the European Union]," analysts from JPMorgan wrote in a research note.
"We expect the second half of 2012 to be more favourable for Mena [the Middle East and North Africa] petrochemicals and will track upcoming macro/economic data points for the directions," the analysts wrote.
A lower oil price typically spells lower profits for petrochemicals producers, as margins come under pressure. Brent crude futures fell 58 cents yesterday to US$117.59 per barrel. But a recent investor aversion to petrochemical stocks has left many attractively priced, according to Riyad Capital.
These include Sabic, which last month reported a fall in first-quarter net profit of 5 per cent to 7.27 billion Saudi riyals. The lower profit nevertheless beat analysts' expectations by about 530 million riyals.
The firm's dividend of 5.6 per cent is particularly attractive, the note added. Sabic's stockhas advanced 7.2 per cent this year to 103.25 riyals, lagging behind the wider Saudi Tadawul All-Share Index.
Industries Qatar generated a net profit during the first quarter of the year of 1.9bn Qatari riyals, a fall of 8.9 per cent from the same period last year.
But sales are rising, with the company's revenue up 8.9 per cent to 4.3bn riyals in the same period.
The stock has gained 9.7 per cent so far this year.
