VietnamCredit About Us Cafe€redit Contact Us
Go to cart
VN stocks to decline on lower oil prices

VN stocks to decline on lower oil prices

Thursday 27, 08 2020
Viet Nam News - HÀ NỘI – Vietnamese stock markets may decline this week as lower crude prices, resulting from the disagreement between major oil producers on Sunday which may drag energy stocks down.

Viet Nam News -

HÀ NỘI – Vietnamese stock markets may decline this week as lower crude prices, resulting from the disagreement between major oil producers on Sunday which may drag energy stocks down.

The benchmark VN Index on the HCM Stock Exchange on Friday inched up 0.1 per cent to finish the week at 579.86 points. The southern index gained 1.3 per cent from the previous week.

The HNX Index on the Hà Nội Stock Exchange declined very slightly on Friday to end the week at 80.26 points. The northern index remained nearly flat over the week.

Oil prices may fall further into negative territory, hitting investor confidence after major producers, such as Saudi Arabia and Russia, failed to reach an agreement on freezing output to stabilise prices.

The talks broke down after Saudi Arabia said a deal would only be reached if Iran joined in, which was considered a disappointing stance, given that the other producers had already agreed to the pact.

Iran had earlier refused Saudi Arabia’s demand to join the deal, wanting to raise its output to pre-sanctions levels. Sanctions against the country were removed earlier this year. Iran’s stance had also prevented other producers from arriving at a production ceiling in December to steady prices.

Investors and traders will now have to wait until the next OPEC meeting in June to see if any progress is made on the production freeze. Crude prices are expected to reach the balance point in mid-2017, instead of mid-2016, which was earlier forecast.

US crude West Texas Intermediate (WTI) slumped 4.8 per cent to trade at US$38.43 per barrel yesterday in early trading. US crude has dropped 8.9 per cent in the last four sessions.

US crude hit a four-month high of $42.17 per barrel, an increase of nearly two-thirds from the 12-year low of $26.21 per barrel on February 11.

Meanwhile, London-traded Brent crude fell 4.3 per cent to trade at $41.27 per barrel, extending its losing streak of 7.7 per cent for a fourth day of trading.

Brent had soared 60 per cent to reach a three-month high of $44.69 per barrel last Tuesday from a record-low of $27.88 per barrel in late January.

Last week, investors could seek profits from the recent gains in energy stocks.

Among energy firms, PetroVietnam Gas Corp (GAS) jumped 5 per cent during the week, PetroVietnam Drilling and Well Service Corp (PVD) added 2.6 per cent, PetroVietnam Technical Service Corp (PVS) gained 2.5 per cent, and PetroVietnam Coating Corp (PVB) was up by 0.9 per cent.

However, investor confidence may decline as analysts have shown little faith in a possible deal between oil producers and its positive effects on the global glut. The decline in energy stocks may also erode investor confidence in other stocks, especially the blue chips that made gains last week, including Vietcombank (VCB), property developer Vingroup JSC (VIC) and insurer Bảo Việt Holdings on the southern bourse, and Tiền Phong Plastic JSC (NTP), An Phát Plastic and Green Environment JSC (AAA) on the northern bourse.

VCB, VIC and BVH advanced by 2.7 per cent, 9.5 per cent and 4 per cent, respectively. AAA and NTP increased by 1.2 per cent and 3.9 per cent.

Securities corps, such as HCM City Securities Corp (HCM), Sài Gòn-Hà Nội Securities Corp (SHS), VNDirect Securities Corp (VND) and Bảo Việt Securities Corp (BVS), also saw gains last week.

Both local markets traded nearly 192 million shares per day worth VNĐ3.1 trillion ($137.5 million), an increase of 16.5 per cent in trading value and 12 per cent in trading volume from the previous week. — VNS

Financial News

You may also like

Banking system outlook stable: Moody's
Tuesday 24, 12 2019

Banking system outlook stable: Moody's

HA NOI (VNS) — The outlook for the Vietnamese banking system is stable,...
Integration Requires Reforms: Minister
Tuesday 24, 12 2019

Integration Requires Reforms: Minister

HA NOI (VNS) — There needs to be more improvement on administrative reform...
+84 981861066