Energy stocks fuel market surge

Energy stocks soared yesterday, boosting the local securities market (Source: www.cafef.vn)

Hanoi (VNA) - Oil and gas stocks lifted the market on December 1 as global oil prices surged after the Organisation of Petroleum Exporting Countries (OPEC) members finally reached a consensus on production cuts.

However, persistent net selling by foreigners continued to weigh on the local market.

The benchmark VN-Index, the measure of 319 stocks on the HCM Stock Exchange inched up 0.2 percent to close at 666.5 points. The gauge slipped 1.5 percent in November.

On the Hanoi Stock Exchange, the HNX-Index tracking 375 stocks increased 1.1 percent to end at 81.6 points. The Index lost 5.1 percent last month.

Oil and gas stocks shored up the market, with major shares such as PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD), PetroVietnam Drilling Mud (PVC), PetroVietnam Coating (PVB) and Petroleum Equipment Assembly & Metal Structure (PXS) hitting the daily limit of 7 percent and 10 percent in HCM City and Hanoi exchanges, respectively.

Oil future contracts gained more than 9 percent on November 30 after the 14-member OPEC decided to cut daily production for the first time in eight years by 1.2 million barrels a day, to a ceiling of 32.5 million barrels. The key non-OPEC oil producers have agreed to cut production by 600,000 barrels a day.

According to some securities companies, OPEC’s oil production cut and rising demand for energy in winter in the United States are likely to support oil prices in the future.

However, this new policy could take some time to impact business performance, although the domestic oil industry is expected to thrive next year.

At the other end of spectrum, the biggest listed stock Vinamilk (VNM) lost 2 percent after two-day rally under foreign selling pressure. Its shares continued to top the most-sold list by foreign investors yesterday for a net value of 101.4 billion VND (4.5 million USD). Foreigners offloaded VNM shares for a total value of 604 billion VND in November.

They were also net sellers in the two markets last month, for a total value of 1.6 trillion VND.

Liquidity decreased with 173.2 million shares worth 3.2 trillion VND (88 million USD) traded in the two markets, down 10.8 percent in volume and 11.1 percent in value compared to November 30.-VNA

VNA