Vietnam shares extend losses as oil prices slump

Shares declined for four days in a row yesterday, dragging the benchmark VN-Index to a one-month low as blue chips maintained their downward trend and global oil prices continued to dwindle. - Photo thesaigontimes.vn

The VN-Index, the measure of total 310 stocks on the HCM Stock Exchange, retreated to 631.6 points, the lowest close since June 30. It lost nearly 4 per cent in the past four days.

On the Ha Noi Stock Exchange, the HNX-Index sank for a third day, down 0.6 per cent to finish yesterday's session at 81.3 points.

Many large-cap shares continued their downward spiral, including private equity firm Masan Group (MSN), insurer Bao Viet Holdings (BVH), large lenders such as Vietcombank (VCB), Eximbank (EIB) and Vietinbank (CTG), and property companies such as VinGroup (VIC), Kinh Bac City Development Holdings (KBC) and FLC Group (FLC).

Oil and gas shares also slumped along with the steep fall in global oil prices. PV Gas (GAS) and PetroVietnam Drilling and Wells Service (PVD) were down 0.8 per cent and 2.8 per cent, respectively.

"We recognised the bearish momentum in most of sectors such as banking, real estate and oil and gas with a bunch of blue chips plunging," Tran Minh Hoang, chief economist at Vietcombank Securities Co wrote in a report.

Hoang said the global market has seen few positive developments following the sharp decline in crude oil price which dropped to around US$40 per barrel, a decrease of 23 per cent from its peak in June.

Meanwhile, recent economic indicators showed that the domestic economy had not prospered.

"It's difficult for the market to return to a positive trend, at least in the short term," he said.

On the bright side, some blue chips recovered and helped cushion the market.

Dairy giant Vinamilk (VNM) rose 1.3 per cent to VND154,000 ($6.91) per share following the information yesterday that it plans to issue nearly 242 million shares to raise charter capital to VND14.5 trillion. It will conclude the list of shareholders to receive the shares by the end of this month.

Liquidity ran dry yesterday when both trading volume and value declined from the previous session.

A total of 132 million shares worth a combined VND2.3 trillion were traded on the two exchanges, down 47.2 per cent in volume and 39.5 per cent in value compared with Tuesday's figures.