MSCI announcement pulls shares down
MSCI announcement pulls shares down
Shares failed to rally on Wednesday, partly affected by Morgan Stanley Capital International (MSCI)’s announcement that Viet Nam will not be included in the company’s watchlist for potential reclassification as an emerging market.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange slid 0.10 per cent to close at 959.13 points.
About 252 million shares were traded on the southern bourse, worth VND5.6 trillion (US$239.4 million).
The index lost 0.28 per cent on Tuesday to close at 960.13 points.
Viet Nam has once again missed the chance to break into MSCl’s reclassification watchlist for a potential status upgrade.
The US-based global provider of equity, fixed income, hedge fund stock indices and multi-asset portfolio analysis tools on Wednesday reclassified the MSCI Kuwait Index to emerging-market status from frontier-market status.
Also on Wednesday, the European Council of the European Union (EU) adopted decisions to sign the EU–Viet Nam Free Trade Agreement (EVFTA) and the EU–Viet Nam Investment Protection Agreement (EVIPA).
In a press release on the same day, the European Council announced that the signing ceremony for the agreements will take place in Ha Noi on June 30, 2019. The document said EVFTA is the “most ambitious” free trade deal ever reached with a developing country, whereby the two sides will cut 99 per cent of the tariffs on goods from both sides.
This information had a positive impact on the textile and seafood stock groups as they will be direct beneficiaries when tariffs are abolished.
Many stocks in the textile and seafood sectors gained strongly such as Vinh Hoan Corporation (VHC), up 3 per cent; Minh Phu Seafood Corporation (MPC), up 5.3 per cent; TNG Investment and Trading JSC (TNG), up 5 per cent; and Thanh Cong Textile Garment Investment Trading Joint Stock Company (TCM), up 2.6 per cent. These gains helped limit the decline of the VN-Index.
The State Capital Investment Corporation (SCIC) announced it would sell State capital at 108 businesses this year. The list includes some giants such as Bao Minh Insurance Corporation (BMI), in which SCIC holds 51 per cent of charter capital.
After the news, BMI increased by 3.5 per cent to VND25,500 per share in the morning session but lost 2.3 per cent in the afternoon due to selling pressure.
The large-cap VN30-Index fell 0.19 per cent to end Wednesday at 866.81 points. Performance was mixed with 14 gainers and 15 decliners, while one stock ended flat.
On the Ha Noi Stock Exchange, the HNX-Index was down 0.19 per cent to end at 103.95 points.
Nearly 36 million shares were exchanged on the northern market, worth VND432 billion.
According to BIDV Securities Company (BSC), the domestic markets continue to experience correction because of profit taking and low liquidity, showing investors are cautious after the Fed's announcements lowered expectations of an interest rate cut.
“The G20 Summit in which leaders of China and the US will meet each other this weekend will greatly affect the volatility of the market in the coming days,” BSC said in its report.
