Vietnam’s stocks fall on weak dong fears

Vietnamese shares retreated at the end of the week's first trading session as investors took profits from banks and insurance companies.
Vietnam’s stocks fall on weak dong fears ảnh 1An investor follows transactions in the stock market on her mobile phone (Source: VNA)

Hanoi (VNA) - Vietnamese shares retreated at the end of the week's first trading session as investors took profits from banks and insurance companies, amid concerns that a weaker dong will hurt their investments in local stocks.

The benchmark VN Index on the HCM Stock Exchange lost 1.2 percent to close at 559.37 points and the HNX Index on the Hanoi Stock Exchange fell 0.4 percent to end at 78.73 points.

Investors in Vietnam's stock markets were also somewhat disappointed with the result of the G20 meeting held in Shanghai last weekend, during which finance ministers and central bankers were unable to come up with a plan to boost global economies, especially China, Saigon-Hanoi Securities Corporation (SHS) wrote in its daily report.

In addition, a possible rate hike, which may be realised by the US central bank in March, threatens foreign investors whose assets in Vietnam may depreciate when the Vietnamese dong becomes weaker than the US dollar.

On February 29, Vietnam's central bank raised the reference mid-point rate for its exchange trading band by 15 dong to 21,914 VND for a dollar, closely approaching the highest mid-point rate of 21,919 VND reached in early January.

The stock market losses were led by the three biggest banks ― the Bank for Investment and Development of Vietnam (BID), Vietinbank (CTG) and Vietcombank (VCB) ― which dropped in value by 3.9 percent, 2.8 percent and 2.4 percent, respectively.

BID gained 12 percent over the last week, CTG rose 7.6 percent in the previous four days, and VCB increased by 4.7 percent last week.

Insurance companies also had a bad trading session, as six of nine listed insurance firms declined in value. The biggest declines were seen by the BIDV Insurance Corporation (BIC) and Bao Minh Insurance Corporation (BMI), which lost 2.3 percent and 3.2 percent, respectively.

BID rose in value by 39 percent in the previous seven days of trading, after the company officially allowed more foreign ownership in its capital.

On the other hand, local energy stocks such as PetroVietnam Gas Corporation (GAS), PetroVietnam Drilling and Well Service Corporation (PVD) and PetroVietnam Coating Corporation (PVB) rose in value as oil trading was strong during February 29 session.

US benchmark crude West Texas Intermediate (WTI) inched up 0.1 percent to trade at 32.82 USD a barrel and the London-traded Brent crude added 0.5 percent to trade at 35.28 USD a barrel.

Investors on February 29 traded nearly 176 million shares worth 2.56 trillion VND (113.8 million USD), a decrease of 24 percent from last week's daily trading value.-VNA

VNA

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