VN Index falls for third day on decreasing investor confidence

March, 23/2016 - 09:00

Vietnamese shares ended mixed on Tuesday, while the benchmark VN Index fell for a third session as investor confidence was low on expectations that Fed will make rate hikes in April, sooner than expected.

Investors at SSI’s exchange floor. The VN Index yesterday fell for a third day on low investor confidence. - VNS Photo Trương Vị

HÀ NỘI – Vietnamese shares were mixed on the two local exchanges yesterday, while the benchmark VN Index declined for a third session on lower investor confidence.

The benchmark VN Index on the HCM Stock Exchange dropped 0.2 per cent to close at 570.91 points, extending a three-day decline of 1.4 per cent.

On the opposite side, the HNX Index on the Hà Nội Stock Exchange managed to rebound 0.1 per cent from Monday’s fall to finish at 80.36 points.

Investor confidence declined on speculations that the US central bank will raise interest rates in April, and China has seen some short-term speculative funds leaving the market, Sài Gòn-Hà Nội Securities Corporation (SHS) wrote in its daily report.

An interest rate hike made by the US central bank could force Việt Nam’s central bank to weaken the Vietnamese đồng so the economy stays competitive in relation to other nations.

Yesterday, Việt Nam’s central bank raised its reference mid-point rate by VNĐ5 to VNĐ21,853 for a US dollar.

Lower investor confidence pulled large-cap stocks down, including dairy firm Vinamilk (VNM) and brokerage companies.

VNM dropped 1.5 per cent at the end of yesterday while among brokerage firms, HCM City Securities Corporation (HCM) fell 0.9 per cent, Sài Gòn Securities Incorporation (SSI) declined by 1.8 per cent, and BIDV Securities Company (BSI) slumped 3 per cent.

Additionally, the banking sector weighed on the markets, led by the Bank for Investment and Development of Việt Nam (BIDV) and Vietinbank, on expectations that they will not benefit from the revised Decree 18/2016/NĐ-CP issued on Monday by the Government. It was issued to help banks reduce pressure on increasing their provisions for non-performing loans, Bảo Việt Securities Corporation (BVSC) wrote in its daily report.

BVSC said that the revised decree aims to help banks that are being restructured and having trouble with financial conditions. But BIDV and Vietinbank are not among those banks.

At the end of the trading day, BIDV (BID) was down 1.7 per cent and Vietinbank (CTG) dropped 1.2 per cent.

The markets were boosted by automobile firms and some other large-cap stocks such as PetroVietnam Gas Corporation (GAS), property developer Vingroup JSC (VIC), insurer Bảo Việt Holdings (BVH), and An Phát Plastic and Green Environment JSC (AAA).

GAS gained 1.1 per cent, VIC rose 0.6 per cent, BVH added 0.9 per cent and AAA jumped 4.2 per cent.

Both local markets traded nearly 186.4 million shares worth VNĐ2.67 trillion (US$118.8 million), a decrease of 17.6 per cent from Monday’s trading value. – VNS