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VietNamNews

Foreign sales weigh on bourses

Update: September, 03/2013 - 09:51
Investors watch market movements at Bao Viet Securities Co in Ha Noi. — VNA/VNS Photo Pham Hau

HA NOI (VNS)— Low valuation after several falling sessions helped buoy investors' trades last Friday but strong selling by foreign investors throughout the week, particularly in blue chips, pushed the two markets down overall.

On the HCM City Stock Exchange, the VN-Index lost 2.9 per cent during the week, closing the Friday session at 427.70 points, while the HNX-Index on the Ha Noi Stock Exchange fell lower 0.37 per cent to a close at 61.19 points.

Pessimism overshadowed both markets, driving down liquidity.

The daily market volume on the southern bourse declined 27 per cent, averaging 43 million shares worth over VND865.5 billion (US$41.2 million) per session.

The northern bourse showed similar figures with more than 16.1 million shares worth VND144.5 billion ($6.9 million) exchanged per day, down nearly 30 per cent compared to the previous week.

Continuous net selling by the foreign sector in large-cap shares such as dairy giant Vinamilk (VNM), insurer Bao Viet Holdings (BVH), Vietcombank (VCB), Vietinbank (CTG) and property developer VinGroup (VIC) were attributed to the market tumble.

The VN30, monitoring the top 30 flagship shares, retreated 2 per cent to 531.23 points.

Overseas investors concluded last week as net sellers on the southern market, unloading combined shares worth VND370.3 billion ($17.6 million). They were also net sellers on the Ha Noi market with a net sell of VND54.2 billion ($2.6 million).

The stocks mostly sold were in the portfolio of the Market Vectors Viet Nam exchange-traded fund (VNM ETF). The fund's investors withdrew around VND137 billion ($6.25 million) during last week's trades. Particularly, about 300,000 VNM fund certificates worth $5.6 million were sold last Monday.

According to many stock analysts, the unloading of shares by the foreign sector in Viet Nam last week is in line with their capital divestments from other emerging markets, on concerns of the prospective military attack on Syria by the US and its allies.

Mounting political instability in the Middle East caused unease in funds and increasing capital outflows which are knocking down currencies and stock markets for many Asian emerging markets.

In Viet Nam, overseas investors were responsible for a whopping net sell worth up to VND880 billion ($41.9 million) on both markets in August. Of which, 33.5 million shares worth VND789 billion were sold on the HCM City market and nearly 8 million shares worth VND92.5 billion were sold on the Ha Noi market.

"In the short term, foreign investors will likely sell shares in the domestic market. Their strong sells will negatively affect major stocks such as BVN, VNM, VIC or MSN which increase the possibility of a further reduction in the VN-Index," said Le Thi Bich Hang, analyst at FPT Securities Co.

Along with weak macro economic data, especially the return of inflation in August, the domestic market was predicted to be volatile in the short term and may retreat 450-455 points, Hang wrote in a report. — VNS


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