Stocks retreat on unstable oil prices

Hanoi (VNA) - Vietnamese shares on February 17 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 percent to close at 547.05 points and the HNX Index on the Hanoi Stock Exchange dropped 0.7 percent to end at 77.47 points.

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

Global crude prices on February 17 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 on February 17, losing 0.9 percent early in the session before rallying 2.2 percent to 29.67 USD 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 percent, while PetroVietnam Drilling and Well Services Corporation (PVD) and PetroVietnam Coating JSC (PVB) were down 2.2 percent and 3.6 percent, respectively.

The banking sector also helped pull the market down after Vietnam's central bank raised its reference mid-point rate for its exchange trading band by 11 VND to 21,895 VND for a US dollar. The mid-point rate has jumped 34 VND 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 20 VND to 22,430 VND for a dollar.

The banking sector index lost 1.1 percent, led by Vietcombank (VCB), BIDV (BID) and Sacombank (STB), which fell 1.2 percent, 1.8 percent and 2.8 percent, respectively. Sacombank on February 17 also reported a net profit of 1.15 trillion VND (51 million USD) for 2015, nearly half of what the bank earned in 2014.

On the opposite side, dairy firm Vinamilk (VNM) rose 1.6 percent 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 7.8 trillion VND (345.5 million USD), an increase of 28 percent from 2014.

Market liquidity rocketed on February 17 from previous day on higher domestic purchases as February 17 was considered a "lucky day" in the lunar calendar, local media reported.

Both local bourses exchanged more than 172 million shares worth 2.85 trillion VND (126.6 million USD), an increase of nearly 50 percent from trading value on February 16.-VNA