HA NOI (VNS) — Shares dropped on both Vietnamese markets on the first trading day of 2016 after a sharp fall in Chinese stocks spooked local investors.
The benchmark VN Index on the HCM Stock Exchange fell 0.8 per cent to close at 574.41 points while the HNX Index on the Ha Noi Stock Exchange dropped 0.6 per cent to end at 79.45 points, ending a three-day rally of 2.7 per cent.
Investors in the Viet Nam's stock markets were alarmed after a 7 per cent plunge in China's benchmark CSI 300 Index triggered markets in Shanghai and Shenzhen to close for the rest of the day, Bao Viet Securities Corporation (BVSC) wrote in a report.
The drop of China's stock market came after the latest PMI statistics continued to show a slowdown of China's economy and investors feared that big shareholders might be allowed to sell their stock assets, which may result in a major sell-off similar to the one that happened last year, BVSC said.
A slowdown of the economy could also force China to devalue its currency further to boost the country's production and competitiveness, which could hurt other economies, including Viet Nam. In addition, the banking sector index dropped 1.8 per cent as banks suffered from a weaker Vietnamese dong.
The official forex rate set by the Viet Nam's central bank for commercial banks was VND22,540 a dollar, and the unofficial rate for the black market was VND22,670 a dollar, an increase of VND10.
Banks that were the biggest decliners included Vietcombank (VCB), which fell 1.6 per cent, the Bank for Investment and Development of Vietnam (BID), which lost 1.9 per cent, and Military Bank (MBB), which dropped 3.4 per cent.
Other big stocks also declined and contributed in the market decline. Dairy firm Vinamilk (VNM) was down 1.6 per cent and food and beverage producer Masan Group (MSN) was down 2.6 per cent.
Both local markets traded nearly 153 million shares worth VND2.3 trillion (US$104 million). — VNS