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PetroVietnam’s capital withdraws to hit stock market, experts say

In Uncategorized on January 8, 2011 at 4:27 am

The oil and gas giant PetroVietnam’s capital withdrawals will effect the stock market in short-term and give a boost to some of its subsidiaries opportunities, financial experts said.

(Photo:Minh Tri)

The Vietnam Oil and Gas Group, known as PetroVietnam, early this year began to withdraw its capital in its subsidiaries, which are not in the group’s core businesses.

The state-owned oil and gas giant also announced it would cut 51 percent of its holdings in the member companies specific in the group’s key fields

The move came from the state-owned gasoline supplier’s attempt to restructure its business model, of which the group will focus on mining and refining oil, according to PetroVietnam’s deputy general director Nguyen Ngoc Su.

The plans come at a time when market developments have facilitated the State’s withdrawal of investment in listed companies such as PetroVietnam Finance (PVF), Phu My Fertilizers (DPM) and Petroleum Technical Services Corp (PVS), baobariavungtau website quoted Su as saying.

The deputy director said PetroVietnam has “basically completed” their plan on restructuring and renewing its subsidiaries, with 14 units being equitised. So far, PetroVietnam has successfully auctioned more than 313 million shares, bringing in VND17,54 trillion (US$986.4 million).

Financial experts said PetroVietnam’s capital withdrawals would affect the slumping stock market, as well as share prices of its listed subsidiaries. However, selling shares in the firms not specific in core businesses will help the oil and gas group to regain a large amount, which will be reinvestments in current projects.

Stock analysts said oil stocks are among the market’s gainers in both short and long term. Listed enterprises specific in mining oil and renting rigs remain in black during the global economic turmoil, and will be the first ones growing sharply when the economy recovers, analysts said.

At present, two subsidiaries of the group including PetroVietnam Technical Services Joint Stock Corp. (PVS) and PetroVietnam Drilling and Well Services Joint Stock Company (PVD) are achieving healthy earning so far this year.

The former made a pretax profit of VND780 billion ($39 million) from a revenue of VND15 trillion in the first ten months of the year. The core businesses’ growth rate of PVS this year rose to over 20 percent year-on-year. PVS closed 2.84 percent lower at VND20,500 on the Ho Chi Minh Stock Exchange on Saturday.

PetroVietnam Joint Stock Finance Corporation (PVF) will likely to achieve thousands of billions of Vietnam dong from exporting crude oil, while PetroVietnam Insurance Joint stock Corp. (PVI) is providing insurance services to a large amount of clients, which are PetroVietnam Group’s subsidiaries and partners.

“There are 25 oil and gasoline firms listing on both exchanges in Ho Chi Minh City and Hanoi. They have a great chance of earning big bucks as local consumer demand for oil this year remains high and the global crude oil price is increasing,” said a director of a HCMC-based brokerage.

Source: SGGP

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