HA NOI (VNS)— Despite being ranked among the world's fastest growing markets, Vietnamese stocks plunged steeply in April as more than US$2.4 billion was wiped from investors' accounts with large-cap shares suffering the biggest losses.
According to American Bespoke Investment Group, Viet Nam ranked 11th among the 40 best performing stock markets in the world, gaining 15 per cent from January to April 24. In Asia, Viet Nam trailed Japan, the Philippines and Indonesia but ranked above Thailand and Singapore.
However, April was a bleak month for the domestic market as the benchmark VN-Index on the HCM City Stock Exchange lost a cumulative 6.1 per cent, ending last Friday's session at 474.51 points, while the HNX-Index on the Ha Noi bourse dropped 5.2 per cent to 58.36 points.
According to analysts, investors' scepticism and lack of confidence in the market was the main factor driving stocks down last month.
Statistics show market capitalisation of the HCM City exchange declined by 5.72 per cent of the total market value to VND771.922 trillion ($26.76 billion). Meanwhile, market capitalisation of the Ha Noi exchange fell by 4.46 per cent, to VND91.757 trillion ($4.37 billion).
Leading large-cap shares were hit the hardest. Food giant Masan Group (MSN) saw almost VND11 trillion ($523.8 million) disappear in April, closing last Friday's session at VND109,000 ($5.19) a share.
Insurer Bao Viet Holdings (BVH) followed with a loss of VND7.58 trillion ($361 million), or 7 per cent of its market value, closing last Friday at at VND46,900 a share ($2.23). PetroVietnam Gas (GAS) also lost over VND4.15 trillion ($197.6 million) of its value, closing last Friday at VND53,000 ($2.52) a share.
Foreign investors sold heavily in the middle two weeks of April but concluded the month as net buyers, responsible for a combined net buy of VND431 billion ($20.5 million) across the two exchanges.
From the beginning of this year, they have picked up a total of VND4.537 trillion ($261 million) worth of shares on the two markets, with VND3.98 trillion ($189.5 million) worth of shares bought on the HCM City exchange and VND554 billion ($26.4 million) on the Ha Noi bourse.
While the majority of foreign buys were blue chips in the first three months of the year, they sold these shares in April and picked up mid-cap stocks such as Viet Nam Ocean Shipping (5 million shares); Petrovietnam General Services (4.6 million); and Bao Minh Insurance (1.7 million).
According to Alan T.Pham, chief economist at VinaCapital, foreign capital inflows will likely remain positive during the second quarter of this year and could exceed the $200 million poured into the stock market during Q1.
He said although the macro economic situation still faced many difficulties, Viet Nam's economic outlook over 1-2 years remained optimistic with GDP forecast to grow by 5.5 per cent this year and from 5.7-6 per cent in 2014.
Two economic factors heavily affecting foreign investment decision, inflation and exchange rates, were being effectively controlled and would bring good results in the long term, he said, adding that these efforts would lay strong foundations for stock market development during the remainder of 2013. — VNS