Sunday, October 23 2016


Energy stocks lead market decline

Update: November, 28/2015 - 10:09
Investors trace market fluctuations at An Binh Bank's stock trading floor in Ha Noi. — VNS Photo Truong Vi
HA NOI  (VNS) — Shares extended losses yesterday in the two markets due to slumping energy stocks on par with the decline in global oil prices.

On the HCM Stock Exchange, following the previous session's 0.9 per cent decline, the VN-Index fell another 1.3 per cent to close at 582.7 points.

On the smaller exchange in Ha Noi, the HNX-Index fell by 0.5 per cent to finish the session at 81.5 points, slightly bigger than Thursday's 0.2 per cent loss.

Energy stocks led the market fall when all of the five listed oil and gas stocks lost value. PV Gas (GAS), the third biggest stock by market capitalisation, dropped 4 per cent. PetroVietnam Drillings and Wells Service Corp (PVD), also in the top 30 shares by market capitalisation and liquidity, decreased by over 0.6 per cent. Other energy stocks fell between 1 per cent and 2 per cent.

"Trade on oil and gas stocks heavily depends on the movements of global oil prices," said Hoang Thanh Tung, an analyst at Royal Securities Company.

Oil prices edged lower on Thursday after a six-day rally amid fears of a supply glut. The US benchmark crude oil, West Texas Intermediate (WTI), slipped 1.4 per cent to US$42.45 a barrel and Europe's crude benchmark, Brent oil, decreased 0.4 per cent to $45.30 a barrel.

Crude oil prices fell 45.5 per cent in the last twelve months and sits 64.4 per cent beneath its five-year peak.

It was therefore not shocking that most of energy stocks followed suit with substantial losses in the last year. PV Gas shares declined by 37.8 per cent in value since January; PVD decreased by 47.2 per cent; and stocks like PetroVietnam Technical Services (PVS), PetroVietnam Drilling Mud (PVC) and PetroVietnam Coating (PVB) saw shares down between 17 per cent and 24 per cent.

"This is a good time for long-term and value investors to buy energy stocks as the share prices are lower than the real value of these businesses," Tung said. He noted that the prevailing 5:8 price-earnings ratio of energy stocks, which is much lower than the average of 12:4 on the HCM Stock Exchange and 9:7 on the Ha Noi Stock Exchange.

Except for Vinamilk (VNM), Viet Nam's largest dairy producer and biggest listed stock, which gained 0.8 per cent, the 10 biggest stocks lost value.

Overall the market condition was negative with 40 per cent of 680 trading stocks declining and 22 per cent reporting gains.

A total of 207.4 million shares with a total value of VND2.76 trillion ($123.2 million) were traded in the two markets yesterday, down 9.4 per cent in volume and 1.4 per cent in value compared to Thursday's figures. — VNS

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