As oil prices fall, VN shares slide
As oil prices fall, VN shares slide
Vietnamese shares pulled back on both local bourses yesterday as energy stocks declined after global oil prices extended losses.
The benchmark VN Index on the HCM Stock Exchange inched down 0.2 per cent to close at 562.22 points and the HNX Index on the Ha Noi Stock Exchange lost 0.6 per cent to end at 78.75 points.
Key energy firms on the market, whose earnings depend on global oil prices, fell due to a further drop of crude on Friday and yesterday.
The US benchmark crude West Texas Intermediate (WTI) fell sharply by 3.1 per cent to trade at US$35.62 a barrel on Friday and has decreased by 13.3 per cent in the past six sessions.
The WTI crude yesterday hit a new seven-year low at $35.38 a barrel after Iran, one of the world's top crude exporters, planned to raise its output when international sanctions over the country's nuclear programme are removed in January, thus exacerbating the world's oversupply.
As a result, PetroVietnam Gas Corporation (GAS) lost 2.6 per cent, PetroVietnam Southern Gas JSC (PGS) was down 1.1 per cent and PetroVietnam Technical Services Corporation (PVS) dropped 3.4 per cent.
Other big stocks such as Masan Group and Vingroup JSC also pulled the market down as they declined after a short gain on Friday. Masan (MSN) fell 2.1 per cent and Vingroup (VIC) was down 0.5 per cent.
In addition, other big stocks such as the Bank for Investment and Development of Viet Nam (BIDV) and Vietinbank declined as investors remained cautious with Viet Nam's foreign exchange rate between the dong and the US dollar as well as the Chinese yuan as they anticipate the US central bank will raise interest rate on Wednesday.
Yesterday, the forex rate between dong and the US dollar hit the ceiling of the central bank's trading band of VND22,547 for a dollar.
"The main factor on Viet Nam's forex rate policy will be Chinese yuan since that currency has devalued recently," Bao Viet Securities (BVS) wrote in a report.
The weakening of yuan came due to its inclusion into the IMF's reserve basket, which reduces the influence of China's Government on the country's currency and recent slowdowns in the world's second largest economy, BVS added, saying that this currency may extend its loss further and break its lowest value recorded.
At the end of yesterday, BIDV (BID) dropped 0.5 per cent and Vietinbank (CTG) fell 1.7 per cent.
Both local exchanges traded more than 155 million shares worth VND2.5 trillion ($110 million), an increase of 13.8 per cent from last week's daily trading value.
