Stocks retreat on unstable oil prices

Thursday, Feb 18, 2016 08:08

The benchmark VN Index on the HCM Stock Exchange inched down 0.2 per cent to close at 547.05 points. — Photo vov

HA NOI (Biz Hub) — Vietnamese shares yesterday fell on both local markets as energy stocks extended losses amid unstable oil prices.

The benchmark VN Index on the HCM Stock Exchange inched down 0.2 per cent to close at 547.05 points and the HNX Index on the Ha Noi Stock Exchange dropped 0.7 per cent to end at 77.47 points.

The energy sector index lost 1.1 per cent, remaining a concern for investors due to volatile global crude prices.

Global crude prices yesterday declined as analysts raised concerns over the likelihood that Iran and Iraq, two of the biggest oil exporters, will join other producers such as Russia, Saudi Arabia and Venezuela on a crude production freeze to stabilise and improve prices.

Trading of US benchmark crude West Texas Intermediate (WTI) was choppy yesterday, losing 0.9 per cent early in the session before rallying 2.2 per cent to $29.67 a barrel.

Oil prices have gone down by a quarter after the Organisation of Petroleum Exporting Countries (OPEC) decided in December not to cut its production in order to defend its market share.

Among local energy stocks, PetroVietnam Gas Corporation (GAS) dropped 1.5 per cent, while PetroVietnam Drilling and Well Services Corporation (PVD) and PetroVietnam Coating JSC (PVB) were down 2.2 per cent and 3.6 per cent, respectively.

The banking sector also helped pull the market down after Viet Nam's central bank raised its reference mid-point rate for its exchange trading band by VND11 to VND21,895 for a US dollar. The mid-point rate has jumped VND34 this week since the market opened after the Tet holiday.

Local commercial banks also raised their trading rates. For example, Vietcombank increased its trading rate by VND20 to VND22,430 for a dollar.

The banking sector index lost 1.1 per cent, led by Vietcombank (VCB), BIDV (BID) and Sacombank (STB), which fell 1.2 per cent, 1.8 per cent and 2.8 per cent, respectively. Sacombank yesterday also reported a net profit of VND1.15 trillion ($51 million) for 2015, nearly half of what the bank earned in 2014.

On the opposite side, dairy firm Vinamilk (VNM) rose 1.6 per cent after the company announced it will buy back more than 400,000 shares and distribute them as bonuses for 12 high-ranking executives in the company after the company last year earned a net profit of nearly VND7.8 trillion ($345.5 million), an increase of 28 per cent from 2014.

Market liquidity rocketed yesterday from Tuesday on higher domestic purchases as yesterday was considered a "lucky day" in the lunar calendar, local media reported.

Both local bourses exchanged more than 172 million shares worth VND2.85 trillion ($126.6 million), an increase of nearly 50 per cent from Tuesday's trading value. — VNS

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