Shares retreat for a second day
Vietnamese shares dropped on August 20 for a second day - and for a seventh session in the last eight - as global oil prices plunged to a six-year low, weighing on energy stocks.
Investors check stock transactions on the ACB floor in Hanoi. Photo: VNSVietnamese shares dropped on August 20 for a second day - and for a seventh session in the last eight - as global oil prices plunged to a six-year low, weighing on energy stocks.
The benchmark VN-Index in the HCM City Exchange fell 1.9 percent to 566.69 and has shed almost 8 percent since the beginning of last week. Energy companies slid an average of 4.6 percent on August 20.
PetroVietnam Gas Corp. (GAS), the country's biggest energy company with a market capitalisation of 86.2 trillion VND (3.85 billion USD), lost nearly 7 percent while Petrovietnam Drilling & Well Service Corp. (PVD) lost 6.8 percent.
A global crude supply glut sent West Texas Intermediate to 40.60 USD per barrel on August 20, the lowest price since March 2009. Oil is down more than 62 percent from 106 USD per barrel last August.
Some analysts said they expect oil prices to stay low. So far, the Organisation of the Petroleum Exporting Countries (OPEC) has refused to reduce its production to boost prices while Iran's recent nuclear agreement will allow the Middle East country to increase output, VPBank Securities Corporation (VPBS) wrote in a report.
Two biggest energy companies on the Hanoi Stock Exchange – PetroVietnam Coating Co. (PVB) and Petroleum Technical Services Corp. (PVS) – lost 6.4 and 6.9 percent, respectively. Overall, the Hanoi bourse fell 1.4 percent to 78.55.
Brokerages also fell after the Ministry of Finance failed to clarify concerns about new rules regarding foreign ownership of local companies. HCM City Securities Corp. (HCM) fell 4.4 percent, VNDirect Securities JSC (VND) dropped 2.6 percent and Saigon-Hanoi Securities JSC (SHS) was down 3.9 percent.
Market sentiment was also undermined by the central bank's two percent devaluation of the dong on August 19, the fourth depreciation this year and second in two weeks.
The central bank's action hurt companies that need to import inputs from foreign suppliers for plastic production, sea transport and electrical manufacturing such as South Logistics Co. (STG), PetroVietnam Transportation Corp. (PVT) and PetroVietnam Power Nhon Trach 2 Co. (NT2), which lost 6.9 percent, 3.4 percent and 0.8 percent, respectively.
Total trading volume on both bourses was more than 155 million shares, worth 2.47 trillion VND (110.3 million USD), an increase of 7.4 percent from August 19.-VNA
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