Shares rebound from ‘Black Monday'

A view of the BIDV Securities Company's securities trading floor (Source: VNA)

Vietnamese shares were volatile on August 25, but ended higher as bargain hunters helped the market regain part of Monday (August 24)'s big loss, although the global situation has yet to improve.

Domestic investors were hit hard again early August 25 after the news that both European and the US stocks fell hard following the latest Chinese rout. Although most Asian shares recovered the day, China 's Shanghai Composite Index dropped another 7 percent when the market closed.

Chinese shares have plunged 15 percent in the past three days, including an 8.5 percent decline on August 24.

"Changes in global markets are too big for Vietnam not to be affected. The most important thing is if domestic economic factors are strong enough to support market sentiment," said Nguyen Van Quy, an analyst at FPT Securities Co.

The benchmark VN-Index on the Hochiminh Stock Exchange recouped 0.58 percent to close the session at 529.98 points. The index suffered a loss of 5.3 percent on Monday, the second time the VN-Index has dropped more than 5 percent this year.

The first occasion was on May 8 during the territorial dispute between Vietnam and China on the East Sea issue.

Shares have lost nearly 17 percent in value since the peak in mid-December and 14 percent since August 11, when China devalued its currency.

On the Hanoi Stock Exchange, the HNX-Index also regained 1.27 percent after a hard fall of 5.81 percent on August 24. The index also lost 13.4 percent in the previous two weeks.

Nearly 8 billion USD worth of market capitalisation was washed from the two markets in two weeks after China 's currency devaluation.

"The market fell hard early this morning, rebounded at noon but declined again in the early afternoon's session. It ended higher by day-end, which showed the psychology of fragile investors," Quy said.

In HCM City , bargain investors increased buying yesterday, keeping liquidity at a good level. Almost 178 million shares worth 2.8 trillion VND (124.4 million USD) were traded by the end of the session, higher than the monthly average volume and value of nearly 120 million shares and 2.12 trillion VND (95.6 million USD) in August.

The overall market condition was neutral with 118 stocks rising, 117 declining and 75 closing unchanged.

Large-cap companies led the market uptrend, especially banks after the Deputy Governor of the State Bank of Vietnam , Nguyen Thi Hong, said in the morning the central bank would not devalue the dong further this year.

Hong said the latest depreciation of 1 percent and an expansion of the dong's trading band from 2 percent to 3 percent two weeks ago weighed the impacts of both the yuan devaluation and the impending interest rate hike by the US Federal Reserve (Fed).

Six of total nine listed banks gained value yesterday. Rises ranged from between 0.7 percent to more than 4 percent. One closed unchanged and two declined.
Asia Commercial Bank (ACB) was the biggest gainer with a rise of 4.1 percent. Sacombank (STB) led the losers with a drop of 2.5 percent.

"Tomorrow's trade will be very important. If the Index continues to move at about 510-530 points, as it did today, it will signal that the market is stabilising and ready for a more stable recovery," Quy said.

However, he warned investors not to try to predict the bottom now as the support information was still weak and global factors remained volatile that can make the market development unpredictable.-VNA