Wednesday, November 25 2020


VN stocks plunge with Brexit vote

Update: May, 24/2016 - 23:00
Investors watch shares being traded on the Sài Gòn Securities Inc exchange platform. Local stocks plummeted yesterday, after the UK voted to leave the EU.— VNS Photo Việt Thanh
Viet Nam News

HÀ NỘI — Vietnamese shares dove yesterday morning, then climbed slightly, as investors reacted in shock to Britain’s decision to terminate its membership in the European Union (EU).

The benchmark VN Index ended at 620.77 points, down 1.8 per cent from Thursday, after plunging more than 5 per cent earlier – the worst drop since January 28.

The HNX Index on the Hà Nội Stock Exchange fell 2 per cent – the steepest decline since January 7 – to finish at 83.62 points, pulling back from a four-day rally of 1.7 per cent.

“Investor confidence fell very low after voting results revealed the UK chose to leave the EU, creating one of the strongest sell-offs ever on global stock markets,” Sài Gòn-Hà Nội Securities Corp (SHS) reported.

The strong sell-off resulted in the highest market trading liquidity in the last two years, SHS said. Investors exchanged more than 380.7 million shares worth VND6.13 trillion (US$272.5 million).

The final Brexit voting results also pushed British sterling down to a 31-year low against the US dollar. The sterling also became weaker against the Vietnamese đồng. The exchange rate between the sterling and the đồng fell 6 per cent at Vietcombank to VND31,320.49 for a sterling.

Meanwhile, the exchange rate between the dollar and the đồng remained nearly flat. The central bank’s daily reference midpoint rate eased to VND21,845 for a dollar, versus Thursday’s value. The central bank said it would keep a close watch on the market to make appropriate adjustments to the exchange rate.

Gold prices on the local exchanges also saw gains. For example, each tael of the Sài Gòn Jewelery Joint Stock Company reached a value of VND35.9 million, before closing between VND35.2 million and VND35.5 million, an increase of 3.8-4.7 per cent over Thursday’s values.

Lower investor confidence pulled most sectors down. Sectors that witnessed the strongest declines included the insurance, energy, brokerage and banking sectors.

All blue chips were down. Insurer Bảo Việt Holdings (BVH) slumped 3.3 per cent, dairy firm Vinamilk (VNM) dropped 2.1 per cent, consumer goods producer Masan Group (MSN) slid 2.2 per cent.

Among the banks, Vietcombank (VCB) and Vietinbank (CTG) lost 2.5 per cent and 2.9 per cent, the Bank for Investment and Development of Việt Nam (BID) and Sài Gòn-Hà Nội Bank (SHB) slipped 1.7 per cent and 3.2 per cent.

The largest securities firms on the stock market suffered heavily from low investor confidence. Sài Gòn Securities Inc (SSI), HCM City Securities Corp (HCM), Sài Gòn-Hà Nội Securities Corp (SHS), and VNDirect Securities Corp (VND) plunged between 2.4-5.8 per cent.

“As global markets are connected closely to each other, Việt Nam’s stock market will likely continue to suffer more from the current low investor confidence in the world,” Bảo Việt Securities said. — VNS


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