Inflation and foreign selling sink VN shares
Inflation and foreign selling sink VN shares
The Vietnamese stock market witnessed a dreadful week, with the VN-Index dropping 4.1 per cent to 486.82 points and the HNX-Index going from 1.3 per cent to 61.42.
The slump was partly caused by the announcement of the consumer price index (CPI) in August, which rose 0.83 per cent over July and 7.5 per cent over the same period last year. Notably, the CPI in Ha Noi jumped 3.1 per cent due to higher medical fees. This has sparked fears that CPI will negatively affect the loosening of monetary policies.
Meanwhile, foreign investors were net sellers last week by a total margin of VND450 billion ($21.2 million).
On Monday, although the market enjoyed positive gains, foreign investors boosted their net selling value to more than VND135.5 billion ($6.3 million). They mainly sold off blue chips, resulting in the retreat of domestic investors.
According to the financial information website , large-cap stocks led the decline with a 2.1 per cent fall. Selling pressure concentrated on blue chips that had been profitable, such as PetroVietnam Gas (GAS), Vinamilk (VNM), property giant Vingroup (VIC), private equity firm Masan (MSN) and Vietcombank (VCB).
Shares of 18 out of 24 industries tumbled. Seafood companies retreated the most, dropping 4.7 per cent. Following were declines in electronic equipment (4.6 per cent) and food and beverages (4.5 per cent).
However, trading volume increased compared to the previous week, rising about 25 per cent on the HCM City Stock Exchange and 26.4 per cent on the Ha Noi Stock Exchange.
Positive news was that the Viet Nam Asset Management Company could start buying non-performing loans (NPLs) next month, with Agribank the first seller.
However, there was a high rate of NPLs in the banking system. NPLs in large banks – the Bank for Investment and Development of Viet Nam , Vietcombank (VCB) and Vietinbank (CTG) – hit more than VND23 trillion ($1.08 billion), only VND1 trillion ($47.1 million) lower than the banking system's total profit.
Sai Gon-Ha Noi Bank (SHB) has the highest NPL rate of 9.04 per cent.
FPT Securities analyst Nguyen Van Quy said that technical indicators still showed bad signals, hinting that the VN-Index might reach a resistance level of 485 points then 480 points. "If the index fails to fight with the 480 point level, the trend will be very negative," he predicted.
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