Sunday, December 4 2016

VietNamNews

Investors shy away from forex risk

Update: December, 24/2015 - 10:27
Investors watch market movements at VNDirect in Ha Noi. — VNS Photo Viet Thanh

HA NOI (VNS) — Shares continued to decline on the two exchanges yesterday as investor worries over foreign exchange rate risks have not been subdued.

The benchmark VN-Index on the HCM Stock Exchange extended losses to four sessions in a row, down 0.4 per cent to close at 564.3 points. The index has fallen a cumulative 2.2 per cent in the past four days.

On the Ha Noi Stock Exchange, the HNX-Index saw a second declining session, giving up 0.6 per cent to end at 78.1 points.

"Without any other recent good news, the risk of a further depreciation of the Vietnamese dong continues to loom over the market," said Tran Thi Thuc Anh, an analyst at Tan Viet Securities Joint Stock Company.

Selling by foreign investors also further weakened investor psychology which may lead to higher selling pressure in the coming sessions, Anh said.

Foreign investors have been net sellers in the two markets since early November, unloading shares worth a total of nearly VND3 trillion (US$133 million). They unexpectedly returned as net buyers yesterday after 16 consecutive net selling sessions but the net buy value was modest at just over VND45 billion ($2 million).

"However, this has not demonstrated that foreign investors will stop their net selling streak," she said.

Large-cap stocks were the main drag of the market as 19 of the top 30 shares by market value and liquidity on the HCM Stock Exchange lost value and only three increased.

Bank and securities stocks were the biggest losers. Six of nine listed banks tumbled with losses ranging from 0.2 per cent and 3.1 per cent while none posted gains.

Big securities firms like Saigon Securities Inc (SSI), HCM Securities Co (HCM) and VNDirect Securities Co also edged down less than 1 per cent each.

The overall market condition was negative with over 32 per cent of 683 listing stocks declined while only 19 advanced.

Liquidity remained low with just 124 million shares worth almost VND1.9 trillion ($85 million) being traded on the two exchanges, down 10 per cent compared with an average value of VND2.1 trillion ($95 million) in the past 10 sessions.

According to analysts at Sai Gon-Ha Noi Securities, the short-term trend could be still negative accompanied with weak investment inflows. They thought now was not a suitable time for speculation but investors could collect good shares with low prices for medium- and long-term investment purpose. — VNS

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