Stocks down on foreign selling

An investor on An Bình Securities trading floor. (Photo: VNA)

Hanoi (VNA) - Vietnamese shares extended losses on October 24 as energy stocks were pulled down by a slide in oil prices and foreign investors increased selling of large-cap stocks on expectations of a US interest rate hike at year’s end.

The benchmark VN Index on the HCM Stock Exchange (HoSE) lost 1 percent to finish at 678.02 points, marking a three-day decline totaling 1.6 percent.

The HNX Index on the Hanoi Stock Exchange (HNX) closed at 82.88 points, down 1.6 percent from the previous session. The northern market index has recorded a loss of 3.1 percent in the last three sessions.

The common VNX Allshare Index, which tracks 450 stocks, dropped 1.1 percent to end at 988.55 points with more than 60 percent of the total stocks registering losses.

Foreign investors increased selling on both local exchanges, targeting blue chips, in order to claim profits after analysts pointed out a high chance of a US interest rate increase at year-end, which made Vietnam’s central bank raise its reference mid-point rate for local currency-exchange trading by 13 VND to 22,032 VND a dollar.

Foreign investors on HoSE recorded a net sell value of nearly 32 billion VND (1.42 million USD), an increase of one-fifth from October 21. On the HNX, foreign investors reduced their net buy value by 73 percent to 3 billion VND.

The largest stock by market capitalisation, dairy producer Vinamilk (VNM), was the most sold by foreign investors, falling 2.2 percent despite an earning report indicating third-quarter and nine-month profits increased by 19.2 percent and 27.6 percent year on year.

“The market did not react positively to good third-quarter earnings reports, thus blue chips started declining,” BIDV Securities Corp (BSC) wrote in a note.

“This reaction proves that VN Index may continue to fall in the next session because the market lacks stocks with better-than-expected business news which could lift investor confidence.”

"But nearly-unchanged market trading liqudity in recent trading days means there is a small opportunity for a sell-off, which could be a factor in stabilising investor sentiment," BSC said.

On the bright side, the Bank for Investment and Development of Vietnam (BID) advanced 0.3 percent after the bank on Friday announced it would pay a total dividend of 2.9 trillion VND in cash to shareholders, ending public concerns in recent months over the bank’s plan to pay dividend in bonus shares to increase its chartered capital.

Several steel producers, including Tien Len Steel JSC (TLH) and Nam Kim Steel JSC (NKG), also advanced after reporting higher profits in the last quarter compared to the same period last year.

More than 167.8 million shares were traded, worth nearly 2.9 trillion VND. These figures were nearly unchanged from last week.-VNA