Investors trace market fluctuations at An Binh Bank's stock trading floor in Hanoi (Source: VNA)Hanoi (VNA) - Shares extended losses in the two markets on November 27 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 percent decline, the VN-Index fell another 1.3 percent to close at 582.7 points.
On the smaller exchange in Hanoi, the HNX-Index fell by 0.5 percent to finish the session at 81.5 points, slightly bigger than Thursday's 0.2 percent 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 percent. PetroVietnam Drillings and Wells Service Corp (PVD), also in the top 30 shares by market capitalisation and liquidity, decreased by over 0.6 percent. Other energy stocks fell between 1 percent and 2 percent.
"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 percent to 42.45 USD a barrel and Europe's crude benchmark, Brent oil, decreased 0.4 percent to 45.30 USD a barrel.
Crude oil prices fell 45.5 percent in the last twelve months and sits 64.4 percent 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 percent in value since January; PVD decreased by 47.2 percent; and stocks like PetroVietnam Technical Services (PVS), PetroVietnam Drilling Mud (PVC) and PetroVietnam Coating (PVB) saw shares down between 17 percent and 24 percent.
"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 Hanoi Stock Exchange.
Except for Vinamilk (VNM), Vietnam's largest dairy producer and biggest listed stock, which gained 0.8 percent, the 10 biggest stocks lost value.
Overall the market condition was negative with 40 percent of 680 trading stocks declining and 22 percent reporting gains.
A total of 207.4 million shares with a total value of 2.76 trillion VND (123.2 million USD) were traded in the two markets on November 27, down 9.4 percent in volume and 1.4 percent in value compared to the previous day's figures.-VNA
