Vietnam shares drop on energy stock

Hanoi (VNA) - Shares declined on October 31 after a two-day rise as large-cap stocks, led by oil and gas stock, lost steam due to negative earnings as well as volatile oil prices.

The benchmark VN-Index, the measure of 314 stocks on the HCM Stock Exchange, was down 1 percent to close at 675.8 points. It gained 1.3 percent in the last two trades.

The Hanoi Stock Exchange, the HNX-Index tracking 379 stocks, also lost 1 percent to end at 82.3 points, erasing all the gains it made in the last two sessions.

The overall market breadth was negative with nearly 37 percent of stocks tumbling while 28 percent increased.

Blue chips led the downturn as 21 stocks, or 70 percent of top 30 largest shares by market capitalisation, lost value.

Energy stocks were the biggest losers. Analysts attributed this slump to their negative third-quarter earnings as well as world oil markets.

On the HCM City exchange, PetroVietnam Drilling and Wells Service (PVD) dipped 6.4 percent after the company reported a strong decline in its revenues and profits. Its three-month net sales decreased 68 percent year-on-year to nearly 1.2 trillion VND (53.8 million USD) while its net profits were down 98 percent in the period, taking in only 10 billion VND, the lowest in the last 10 years.

PVD earned 4.54 trillion VND in revenues and 86 billion VND in net profits, down 40 percent and 95 percent, respectively, compared to the same period last year.

The biggest listed energy company, PV Gas (GAS), dropped nearly 3 percent. GAS also saw its profit down 60 percent in the third quarter.

On the Hanoi bourse, other oil and gas stocks, including PetroVietnam Technical Services (PVS), PetroVietnam Drilling Mud (PVC) and PetroVietnam Coating (PVB), slipped between 3 percent and 8 percent.

Oil prices witnessed the first weekly loss last week since mid-September due to unrest at the weekend meeting of the Organisation of Petroleum Exporting Countries (OPEC), the MarketWatch reported.

“Volatility of the stock indices at this stage could increase the market exposure and impede the VN-Index from conquering the short-term peak of 690 points,” analysts of BIDV Securities Co wrote in a note.

Money flows focused on mid-cap shares, particularly in the sectors of construction, building materials and real estate.

A total of 168 million shares worth 2.6 trillion VND were traded in the two markets on October 31. Foreign investors were net buyers for the value of 53.6 billion VND in the HCM City’s market but they increased selling on the Hanoi exchange, responsible for a net sell value of 2 billion VND.-VNA