Local shares continue to spiral (Photo:vietnambreakingnes)
Shares extended losses to four days in a row on August 14, but at a slower pace as the impacts of China's sharp currency devaluation and August 12’s forex trading band revision by the State Bank of Vietnam weakened.
China's central bank reversed trend and raised the reference rate of the yuan by 0.05 percent the August 14 morning, lifting the fix from 6.4010 per US dollar to 6.3975, ending a three-day decline, Bloomberg News reported.
On the Ho Chi Minh Stock Exchange, the VN-Index, the measure of 308 stocks, lost another 0.88 percent to close the session at 589.03 points, its lowest since June.
The gauge slumped more than 4 percent in just four days.
The market breadth was slightly pessimistic with over 40 percent declining and 32 percent rising.
Banks were the main drag as five of six banks posted losses, averaging a decline of 1.6 percent.
PV Gas (GAS), the second biggest stock on the market in terms of capitalisation (99.5 trillion VND or 4.6 billion USD), fell 6.3 percent, cutting it close to the daily limit of 7 percent. Shares ended at 52,500 VND (2.41 USD), in line with crude oil prices, which hit a six-year low on global markets.
According to Viet Dragon Securities Co, banks, oil and shares companies will continue to be affected by the depreciation of the dong.
It forecasts that some banks' forex trading business will incur losses due to the negative status of US dollar. Forecasts said that oil and gas companies would be immune to direct effects of recent exchange rate fluctuations, but the fall in oil prices will negatively affect their performance.
Liquidity on August 14 continued to drop. Market volume was down nearly 30 percent from the previous day, totaling nearly 91 million shares. Trading value also slumped with a 20 percent drop to reach 1.71 trillion VND (78.4 million USD).
On the Hanoi Stock Exchange, the HNX-Index also dipped for the forth-straight day with a drop of 0.68 percent, finishing August 14 at 80.88 points. The gauge dropped around 5 percent over the week.
The market condition was positive as gainers outnumbered losers by 92-76, and the other 197 closed flat.
Liquidity remained low with 40 million shares worth 437 billion VND (20 million USD) traded by the end of the session, down 15 percent in volume and 10 percent in value from the previous day’s levels.-VNA
