MSCI announcement pulls shares down

Update: June, 26/2019 - 17:44


MB Securities Co's stock trading floor. Shares failed to rally yesterday on local stock exchanges. — VNS Photo Trương Vị

HÀ NỘI — Shares failed to rally on Wednesday, partly affected by Morgan Stanley Capital International (MSCI)’s announcement that Việt Nam will not be included in the company’s watchlist for potential reclassification as an emerging market.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange slid 0.10 per cent to close at 959.13 points.

About 252 million shares were traded on the southern bourse, worth VNĐ5.6 trillion (US$239.4 million).

The index lost 0.28 per cent on Tuesday to close at 960.13 points.

Việt Nam has once again missed the chance to break into MSCl’s reclassification watchlist for a potential status upgrade.

The US-based global provider of equity, fixed income, hedge fund stock indices and multi-asset portfolio analysis tools on Wednesday reclassified the MSCI Kuwait Index to emerging-market status from frontier-market status.

Also on Wednesday, the European Council of the European Union (EU) adopted decisions to sign the EU–Việt Nam Free Trade Agreement (EVFTA) and the EU–Việt Nam Investment Protection Agreement (EVIPA).

In a press release on the same day, the European Council announced that the signing ceremony for the agreements will take place in Hà Nội on June 30, 2019. The document said EVFTA is the “most ambitious” free trade deal ever reached with a developing country, whereby the two sides will cut 99 per cent of the tariffs on goods from both sides.

This information had a positive impact on the textile and seafood stock groups as they will be direct beneficiaries when tariffs are abolished.

Many stocks in the textile and seafood sectors gained strongly such as Vĩnh Hoàn Corporation (VHC), up 3 per cent; Minh Phú Seafood Corporation (MPC), up 5.3 per cent; TNG Investment and Trading JSC (TNG), up 5 per cent; and Thành Công Textile Garment Investment Trading Joint Stock Company (TCM), up 2.6 per cent. These gains helped limit the decline of the VN-Index.

The State Capital Investment Corporation (SCIC) announced it would sell State capital at 108 businesses this year. The list includes some giants such as Bảo Minh Insurance Corporation (BMI), in which SCIC holds 51 per cent of charter capital.

After the news, BMI increased by 3.5 per cent to VNĐ25,500 per share in the morning session but lost 2.3 per cent in the afternoon due to selling pressure.

The large-cap VN30-Index fell 0.19 per cent to end Wednesday at 866.81 points. Performance was mixed with 14 gainers and 15 decliners, while one stock ended flat.

On the Hà Nội Stock Exchange, the HNX-Index was down 0.19 per cent to end at 103.95 points.

Nearly 36 million shares were exchanged on the northern market, worth VNĐ432 billion.

According to BIDV Securities Company (BSC), the domestic markets continue to experience correction because of profit taking and low liquidity, showing investors are cautious after the Fed's announcements lowered expectations of an interest rate cut.

“The G20 Summit in which leaders of China and the US will meet each other this weekend will greatly affect the volatility of the market in the coming days,” BSC said in its report. — VNS

  • Tags: