Big players hit hard by unstable stock market in Vietnam

By Minh Son   July 8, 2018 | 04:00 am PT
Big players hit hard by unstable stock market in Vietnam
An investor sits in front of stock market screens at a securities company in Hanoi, Vietnam. Photo by Reuters/Kham
Those who poured big sums into blue chip stocks are hurting as the markets tumble.

In the first half of 2018, at least 13 major funds and investors on Vietnam’s stock market suffered negative growth rate in their net asset value (NAV), which is value per share of a fund on a specific date or time.

Leading this was Hanoi-based Hestia Joint Stock Company registered on the Unlisted Public Company Market (UPCoM) on the Hanoi Stock Exchange (HNX), which saw its NAV falling by 19.4 percent.

Thien Viet Securities Joint Stock Company came second with its Thien Viet Growth Fund 2 (TVAM TVGF2) on the Ho Chi Minh stock exchange (VN-Index) dropping 11.6 percent.

Other funds and investors in the negative growth list include U.S.-based VanEck Vectors Vietnam ETF (VNM ETF), Passion Investment, Pyn Elite Fund, the TCEF fund of Techcom Capital Co. Ltd, SSI Sustainable Competitive Advantage Fund (SSI SCA), VCBF Leading Investment Fund (VCBF-BCF), Vietfund Management Company (VMFVF4) and Vietnam Enterprise Investment Limited (VEIL), managed by Dragon Capital Group.

Why this happened to these major investors is not so difficult to understand, market observers say.

It is common that big investors tend to pour investments into blue chip stocks, and from the second half of 2017 to the first few months of 2018, it was those blue chips that pushed the Vietnam stock market up high, and the investors profited, duly.

The country’s stock market hit a 10-year high and reached 984.24 points in the last trading session of 2017. It had not broken the 800-point barrier since 2008.

Continuing its good run, the VN-Index, the benchmark stock index of Vietnam, grew 19.33 percent in the first three months of this year, becoming the best-performing market in the world.

It passed the 1,200-point level on April 9 and has stayed at 900 something before things started to turn bad in the second quarter when the market plunged 18.19 percent, making it the worst-performing market in the world.

In such a reversal, it was the blue chips investors that suffered the most, and now, have to face the consequences.

A typical example is Passion Investment.

This fund spent almost 95 percent of its total VND220 billion ($9.5 million) acquiring 3.24 million shares of the Vietnam Prosperity Joint Stock Commercial Bank (VPBank), as shown it its Q1 report.

The price of VPBank’s shares kept rising from the year’s beginning to early April when it reached the peak of nearly VND70,000 ($3) per share.

Then it dropped to VND50,000 and fell nonstop to around VND25,000 recently.

“When all investors are pinning their hopes too high and the stock market is pushed for a long time, a small impact can worry investors and make them scatter,” an expert who wanted to stay unnamed told VnExpress earlier as he explained the plunge.

Nguyen The Minh, director of analysis at Yaunta Securities Vietnam Company, said that many investors had started selling their stocks back in the first quarter.

Other experts said the global situation, from the tensions in Syria when the U.S.-led air strikes targeted Syrian military sites to the U.S.-China trade war and worries about global capital movements as the U.S.’s Federal Reserve System raised interest rates, might have affected the stock exchange in the second quarter.

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