Vinamilk fall extends stock market gloom

Hanoi (VNA) - Vietnamese shares fell further on September 7, driven down by dairy firm Vinamilk while foreign investors remained net sellers for six consecutive sessions.

The benchmark VN Index on the HCM Stock Exchange dropped 0.4 percent to finish at 661.28 points. The southern market index has fallen 2 percent in the last four sessions.

The HNX Index on the Hanoi Stock Exchange retreated 0.2 percent to end at 84.22 points after rising 0.4 percent during the previous two trading days.

“Continuous downward trend of large-cap stocks such as dairy firm Vinamilk (VNM) kept local market in the negative territory from the beginning of the day,” Bao Viet Securities Co (BVSC) wrote in its daily report.

Dairy firm Vinamilk (VNM) continued to suffer from foreign selling as foreign investors sold nearly 2.8 million shares during the session worth 294 billion VND (13 million USD).

Some of the 2.8 million Vinamilk’s shares sold by foreign investors could come from Amersham Industries Ltd and Grinling International Ltd, which are the members of the HCM City-based investment fund Dragon Capital Group Ltd, BVSC said.

The two foreign shareholders on September 1 registered to sell 4.5 million shares of Vinamilk within one month from September 7.

“The two funds’ sell orders could only mean regular profit-taking and proved that Vinamilk has become profitable enough for investors after a sharp gain in the last two months,” BVSC said.

“If foreign investors continue to withdraw from Vinamilk over the coming days, the market would decline deeper as VNM is now the largest stock by market capitalisation.”

VNM had jumped more than one-third to hit the highest price ever of 156,000 VND per share at the end of August. The share closed down 2.7 percent to drop total 6.4 percent within the last four days.

Steel maker Hoa Sen Group (HSG) on September 7 lost 0.9 percent on public concerns that its new steel plant in the central province of Ninh Thuan would cause environmental damage to the coastal region. HSG has declined 2.9 percent after two days.

Foreign investors recorded a net sell value of more than 263 billion VND - marking the sixth trading day as net sellers on the stock market.

On September 7, the central bank cut its daily reference mid-point rate for local foreign-currency trading by 5 VND to 21,917 VND for a US dollar as weak data from the US services sector reduced chance for a US interest rate hike this month, bringing the dollar down against other currencies.

Trading liquidity was slightly down from September 6 as investors exchanged more than 142.5 million shares worth 3.3 trillion VND.-VNA