Vietnam shares slump after three-day rise

The benchmark VN-Index, which measures 312 stocks on the HCM Stock Exchange, was down 0.5% to close at 684 points. The index increased over 1 percent in the previous three trading periods.

The HNX-Index, which tracks 378 stocks on the Hanoi Stock Exchange, edged down 0.8% to end the session at 85.3 points.

It gained 1.4% in the previous two days. Large-cap stocks led the market downturn. Eighteen of the top 30 highest valued stocks in the HCM City’s market lost value, including biggest listed stock Vinamilk (VNM), Vietcombank (VCB), Vietinbank (CTG), BIDV (BID), Masan Group (MSN) and Hoa Phat Group (HPG).

The biggest listed steelmaker, Hoa Phat Group, experienced the seventh losing day with cumulative decrease of over 12 percent.

Analysts are struggling to comprehend the cause of this slump, as there was no negative news clouding the company. HPG is still the most profitable steel producer in Vietnam, with six-month net profit reaching over VND3 trillion (US$134.5 million), a rise of 60.4% over the same period of last year.

However, the shares used to top the most-sold list by foreign investors during this period. On the other end of the spectrum, energy stocks maintained their rise and cushioned the market fall, boosted by strong growth of global oil.

The West Texas Intermediate (WTI) oil on October 6 surpassed 50 USD per barrel for the first time since June, confirming the strong influence of OPEC’s agreement to limit oil supply. PV Gas (GAS) and PetroVietnam Drilling and Wells Service (PVD), the two largest listed oil and gas shares, gained 0.6 percent and 3.1 percent, respectively.

Smaller firms Petroleum Equipment Assembly & Metal Structure (PXS) and PetroVietnam Technical Services (PVS) increased 0.4% and 1.9%, respectively.

“The market continued to accumulate valuation and showed signs of divergence,” analysts at Artex Securities Co wrote in a note. Investments would likely flow toward stocks with good indicators and promising earnings such as banks, oil and gas companies, they said.

Foreign investors concluded as net sellers in the HCM City after two net buying session, offloading shares worth net value of over VND130 billion. They remained net buyers in the Hanoi market for a small net value of VND6 billion. Liquidity was positive with over 188 million shares worth VND3.4 trillion traded in the two markets.