HÀ NỘI – Shares declined yesterday on the two national stock exchanges after brief rises on Tuesday. Investors remain cautious about trading exchange-traded funds, which will finish their third-quarter portfolio reallocation by the end of this week.

The benchmark VN-Index, the measure of 311 stocks on the HCM Stock Exchange, inched down 0.5 per cent to close yesterday at 656.6 points. The Index closed unchanged on Tuesday after two falling sessions.

On the smaller exchange in Hà Nội, the HNX-Index was down 0.6 per cent, closing at 83.4 points. It increased 0.2 per cent in the previous session.

Large-cap stocks continued to drive the market down. Only six of the 30 biggest most valued stock trended upward, while while 22 lost value.

The highest-valued stock, Vinamilk (VNM), was down 0.6 per cent to VNĐ144,000 (US$6.46) per share. It tumbled in three out of the last four settlements and continued to top shares sold most by foreign investors.

Steelmaker Hòa Phát Group (HPG), ranked No 2 in stocks most sold by the foreign sector, decreased in value 0.2 per cent yesterday.

Of few gainers, two were banks, including the second-most-valued listed lender Vietcombank (VCB) and Sacombank (STB). Other banks like BIDV (BID), Vietinbank (CTG) and Military Bank (MBB) slipped between 0.7 per cent and 2.5 per cent.

According to stock analysts at Sài Gòn-Hà Nội Securities Co, downward correction pressure will likely continue in the remaining sessions of this week.

“This correction phase will unlikely last long. The market may rebound after the portfolio restructuring of exchange-traded funds,” these analysts wrote in a report.

Portfolio reallocation of FTSE and VNM Exchange Traded Funds (ETFs)  will finish by September 16.

Local markets often face volatile sessions in early March, June, September and December every year, following the trading reallocation of ETFs, when the FTSE and VNM EFTs hold a combined assets of over $700 million, primarily focusing on Vietnamese large-cap stocks.

However, reducing holdings by foreign investors has created opportunities for local investors to collect shares in big companies such as Hòa Phát Group, Petrovietnam Transportation Corp (PVT), Vietcombank (VCB), PetroVietnam Technical Services Corp (PVS) and Saigon Securities Inc (SSI), analysts at Investment Vietnam Securites Co wrote in a note.

The foreign sector extended their net selling streak to 11 consecutive sessions on the HCM City’s exchange, lifting the total net sell value to VNĐ1.44 trillion. Their net sell value decreased yesterday to just VNĐ43 billion.

In the Hà Nội market, they returned to be net sellers after two net buying sessions, offloading shares worth VNĐ407 million.

A total of over 130 million shares worth VNĐ2.1 trillion were traded in the two markets, up 4.3 per cent in volume but down 22.2 per cent in value from Tuesday’s figures. – VNS