|
Will petrol price hike bludgeon stock market?
Opinions still vary about how the petrol price increase will affect the stock market. Some experts say that the bleak stock market will be worse off with the sharp petrol price hike, while others believe that the petrol price increase will not have much effect.
Hoang Thach Lan, Head of the Analysis Division under the Small- and Medium-size Enterprise Securities Company (SMES), HCM City branch, said that the information about the petrol price increase had immediate impacts on transactions at the HCM City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HASTC). At 10 am July 21, the electronic boards were pale green (which showed the prices were at floor levels).
Some analysts say that the stock price decreases accidentally coincided with the petrol price information. As the prices of the top 10 stocks have been rising continuously in the last many trading sessions, investors are now selling shares of these (DPM, PVD, STB, ACB, PVI, BVS).
However, Lan believes that it is still necessary to analyse why both the bourses fell down again after the petrol price increases were announced.
In theory, according to Lan, petroleum is a key input material of the national economy. The prices of commodities and services will increase immediately when the petrol price rises by 30%. Investors make investment decisions based on the future of listed companies. As listed companies are facing big difficulties, investors will hesitate to purchase shares of the companies.
Investors have just come back to the market, which has helped the stock market recover a little. However, at this moment, investors are still very sensitive to any negative information and they will stop investments on any negative information – like a petrol price increase. Therefore, it is very likely that investors will sell stocks and wait.
Lan said that transport companies will be the first victims of the petrol price hike, so the prices of shares of these companies will decrease first. He estimated that 287 listed companies on both HOSE and HASTC will suffer direct impacts, while two banks, four investment funds, four securities firms and three insurance companies will suffer indirect impacts.
However, Lan said that the stock market is still being supported by two factors: the high demand of foreign investors and bright business reports of leading listed companies.
Listed companies have announced very impressive business results, including Asia Commercial Bank, which made the profit of VND1tril in H1, while PVD made the profit of VND700bil.
Meanwhile, other experts do not think that the petrol price increase will have serious impacts on the stock market, affirming that the top 20 shares, which have the biggest capitalisation value on the market, will not bear much influence from the petrol price increase.
The prices of the top 20 decide the tendency of the VN Index.
Dr Pham Thanh Thai Linh, an analyst with Bao Viet Securities Company, said that some companies will even benefit from the petrol price, such as DPM of Phu My Fertiliser Plant, whose input material prices will remain unchanged.
HCM City Securities Company (HSC), in its daily bulletin, also said it believed there would not be big impacts on the stock market.
VNN
|
