Vietnamese shares down after two-day rally

Hanoi (VNA) - Shares declined on November 2 after a two-day rally as momentum fueled by generally positive third-quarter earnings began to peter out.

On the HCM Stock Exchange, the benchmark VN-Index lost 0.8 percent to close at 602.8 points on November 2. It increased 1.9 percent in the previous two sessions.

On the smaller exchange in Hanoi, the HNX-Index decreased 1.4 percent to finish at 81.1 points, erasing gains from the last two days.

"Many companies have now posted their third-quarter earnings," said Bui Nguyen Khoa, a stock analyst at BIDV Securities Co. "This has prompted investors to sell shares to lock in profits on fears that the market may lack a catalyst in the short term to push the market higher."

Large-cap shares were the biggest decliners, including dairy giant Vinamilk (VNM), insurer Bao Viet Holdings (BVH), real estate developer VinGroup (VIC) and private equity Masan Group (MSN).

Vinamilk, Vietnam's largest dairy producer as well as the biggest stock by market capitalisation, has climbed over 17 percent in the past one month and Khoa said many investors started to sell out after the company reported its third-quarter earnings.

Vinamilk decreased 0.9 percent for a second consecutive session, closing at 117,000 VND (5.22 USD) per share. The dairy firm on October 29 posted net sales of over 10.5 trillion VND (469 million USD) in the last quarter, up 20.5 percent year-on-year. Its net profit reached over 2.1 trillion VND (94 million USD), up 55.2 percent during the period.

Ending September, Vinamilk earned a total of nearly 5.9 trillion VND (263.4 million USD) in net profit, up 35.4 percent year-on-year.

Other large-cap stocks have increased substantially in October, like Bao Viet (up 27.4 percent) and VinGroup (up 10.6 percent) which also faced strong selling pressure. BVH tumbled 3.3 percent on November 2 while VIC fell 1.1 percent.

"The VN-Index could retreat to around 600 points in the coming sessions if selling forces continue to rise," Khoa said.

The overall market condition was negative with nearly 16 percent of 678 stocks advancing while up to 47 percent declined.

Liquidity rose slightly with the trading volume up 29.5 percent from October 30 to 166.3 million shares in the two markets, but the value of trades was up just 4 percent to reach 2.6 trillion VND (116.1 million USD).

Ocean Group (OGC), a financial investment firm, was the most active nationwide on November 2 with nearly 18 million shares traded and its price decreased by the daily limit of 7 percent to just 2,700 VND (0.12 USD) a share, ending the five-day rally.

The share price has soared almost 21 percent in the past five days after the company estimated its third-quarter profit reached over 1.64 trillion VND (73.2 million USD), completing its yearly target.-VNA