Shares slow down as banks lose steam

Update: May, 24/2017 - 09:00
Employees working at the Hà Nội Stock Exchange. - PHOTO Huy Hùng
Viet Nam News

HÀ NỘI – Shares declined on Tuesday after bank stocks, which had fueled market momentum in the previous session, tumbled unexpectedly as investors sought to earn from short margins.

The benchmark VN-Index on the HCM Stock Exchange lost value for the first time in the last three days, dropping 0.43 per cent to close at 740.93 points. The southern market index increased 2.34 per cent in the last two sessions.

On the Hà Nội Stock Exchange, the HNX-Index inched down 0.88 per cent to end at 91.90 points.

Only one of nine listed banks maintained growth on Tuesday, while seven fell.

Two of the three biggest listed lenders by market value and total assets including Vietcombank (VCB), Vietinbank (CTG) decreased by 0.8 per cent and 2.6 per cent, respectively. BIDV (BID) was the only gainer with modest growth of 0.8 per cent.

The banking sector recorded an average loss of 1.72 per cent, data on showed.

On Monday, the Government submitted a new resolution on bad debts to the National Assembly, which is expected to facilitate and speed up the process of settling bad debts. Many analysts predicted another rising wave for bank stocks.

This did not happen as investors increased selling on bank stocks to make quick profits.

“The market is in the correction stage after a strong rally on Monday. Declining liquidity and widening negative market breadth show investors’ caution about over-excitement of yesterday’s trade,” analysts at BIDV Securities Co wrote in a Tuesday’s report.

These analysts predicted the VN-Index would continue to test the support threshold of 740 points and likely move around this level in the coming sessions.

The VN-Index expanded 3.2 per cent this month and 11.4 per cent this year.

According to Vietnam Investment Securities Co, many stocks have risen excessively in the short term which lifted the VN-Index to a 10-year peak and surpassed its real value. The brokerage firm said this upward momentum was pushed up by high leverages and cautioned it could create pressure of massive selling when the market corrected down.

On the positive side, growth of large-cap shares such as dairy giant Vinamilk (0.5 per cent), local brewer Sabeco (0.8 per cent) and the largest mobile phone retailer Mobile World Group (0.4 per cent) cushioned the market.

Liquidity declined with a total of 327.6 million shares worth a combined VNĐ5.4 trillion (roughly US$240 million) traded in the two markets, down 10.4 per cent in volume and 21.7 per cent in value compared to Monday’s figures.

Foreign investors continued to comb local shares but their net buy value decreased by a substantial 72 per cent from the previous session, reaching VNĐ135 billion in the two markets. – VNS