Monday, October 24 2016


Local shares continue to spiral

Update: August, 15/2015 - 09:46
HA NOI  (VNS) — Shares extended losses to four days in a row yesterday, but at a slower pace as the impacts of China's sharp currency devaluation and Wednesday's forex trading band revision by the State Bank of Viet Nam weakened.

China's central bank reversed trend and raised the reference rate of the yuan by 0.05 per cent yesterday morning, lifting the fix from 6.4010 per US dollar to 6.3975, ending a three-day decline, Bloomberg News reported.

On the HCM Stock Exchange, the VN-Index, the measure of 308 stocks, lost another 0.88 per cent to close the session at 589.03 points, its lowest since June.

The gauge slumped more than 4 per cent in just four days.

The market breadth was slightly pessimistic with over 40 per cent declining and 32 per cent rising.

Banks were the main drag as five of six banks posted losses, averaging a decline of 1.6 per cent.

PV Gas (GAS), the second biggest stock on the market in terms of capitalisation (VND99.5 trillion-US$4.6 billion), fell 6.3 per cent, cutting it close to the daily limit of 7 per cent. Shares ended at VND52,500 ($2.41), in line with crude oil prices, which hit a six-year low on global markets.

According to Viet Dragon Securities Co, banks, oil and shares companies will continue to be affected by the depreciation of the dong.

It forecasts that some banks' forex trading business will incur losses due to the negative status of US dollar. Forecasts said that oil and gas companies would be immune to direct effects of recent exchange rate fluctuations, but the fall in oil prices will negatively affect their performance.

Liquidity yesterday continued to drop. Market volume was down nearly 30 per cent from Thursday, totaling nearly 91 million shares. Trading value also slumped with a 20 per cent drop to reach VND1.71 trillion ($78.4 million).

"The market outlook remained volatile as negative data continued to weigh down the market. However, after the strong decline this week, the Index may rebound in the next session when bargain investors jump in, particularly after many shares' prices have fallen back to attractive levels," analysts at BIDV Securities Co wrote in a report.

On the Ha Noi Stock Exchange, the HNX-Index also dipped for the forth-straight day with a drop of 0.68 per cent, finishing yesterday at 80.88 points. The gauge dropped around 5 per cent over the week.

The market condition was positive as gainers outnumbered losers by 92-76, and the other 197 closed flat.

Liquidity remained low with 40 million shares worth VND437 billion ($20 million) traded by the end of the session, down 15 per cent in volume and 10 per cent in value from Thursday's levels. — VNS

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