Wednesday,  Oct 24, 2018,04:05 (GMT+7) 0 0
VN-Index suffers biggest loss in 3-1/2 years
Phuong Thao
Tuesday,  Feb 6, 2018,23:22 (GMT+7)

VN-Index suffers biggest loss in 3-1/2 years

Phuong Thao

HCMC – Vietnam’s stock market capitalization dipped by a whopping VND181.7 trillion, or US$8 billion, on February 5 as the VN-Index of the Hochiminh Stock Exchange suffered the biggest single-day drop in three years and a half.

The HCMC bourse saw 269 stocks falling, with 71 stocks closing at the floor prices, while only 50 others managed to rise. The index lost a massive 56.33 points, or 5.1%, against last Friday at 1,048.71.

Trading volume on the bourse surged 40.8% at 282 million shares and value increased 38.5% at VND8.3 trillion. Lender STB was the most actively traded stock with 22.1 million shares traded but it plunged to the floor price.

All large-cap stocks declined strongly, except for property firms NVL, ROS and CTD that went up 0.12%, 0.56% and 1.13% respectively.

On the Hanoi market, the HNX-Index tumbled 4.06% at 118.94 points. There were 92.5 million shares worth VND1.28 trillion changing hands, rising 42% and 44.5% versus the previous session respectively.

According to Viet Capital Securities Company, a global rout that began in the U.S. last Friday slammed into Vietnamese equities on February 5.

Vietnam was the worst performer in the Asia Pacific region as the MSCI Asia Apex 50 Index slumped 1.4%. While the U.S. downturn was undoubtedly the trigger, domestic factors probably contributed to the decline.

First, Vietnam benefited from nearly US$400 million of net foreign buying in January, which contributed to a 12.8% gain in the VN-Index during the month.

Second, the recent regulatory change which will increase the margin ratio (the percentage of equity that margin buyers must hold) from 50% to 60% gives investors little choice of adding more funds to their margined positions or reducing their holdings. The bearish momentum on February 5 could increase their preference for the latter, it explained.

“Having said that today’s events do not change our fundamental view on the market. Recent earnings reports have generally been good. The VN-Index recorded 23.3% growth in 2017 earnings per share, even better than the 19.6% growth for the 12 months ended September 30, 2017.

“Furthermore, the International Monetary Fund recently released a report, raising its forecast for 2018 global gross domestic product growth to 3.9%. This should have positive impact on Vietnam. We therefore maintain our outlook that the VN-Index can reach 1,250 points in 2018.”

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