VN-Index plummets in year-end volatility

Although there is a clear uptrend, Vietnam’s benchmark index has been fluctuating significantly in the last eight sessions, swinging from a 0.79 percent losing session last Thursday to a 1.46 percent gaining session the day after.

Analysts say the increase in volatility is largely due to investors putting more money into non blue-chip stocks, which they judge to have relatively more profit-making potential when large caps have seen strong growth in the past few months.

While the VN-Index still has room to grow, supported by marcro factors such as low interest rates and a real estate slowdown, investors have also grown more cautious even as the index continues to reach new highs despite Covid-19 impacts on the macro-economy. This has caused more frequent corrections of late, the analysts add.

On Thursday, the Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based, saw 290 stocks lose and 148 gain.

Total trading volume was 10 percent higher than the last session, at VND14.53 trillion ($630.18 million), the highest recorded on HoSE this year excluding sessions with major M&A put-through transfers.

The VN30-Index for HoSE’s largest caps performed slightly better than the general market, down 1.24 percent, and accounted for slightly more than half of total trading volume. Twenty-two stocks lost and just five gained.

As in the previous session, private banks outperformed the rest of the blue chips. HDB of HDBank rose 1.6 percent, TCB of Techcombank 1.4 percent, VPB of VPBank 1 percent, STB of Sacombank stayed flat, while EIB of Eximbank was down by a marginal 0.6 percent.

The only other stocks that managed to stay in the green were POW of electricity generator PetroVietnam Power, up 1.3 percent, and MSN of food conglomerate Masan Group, 0.6 percent.

In the opposite direction, state-owned banks were among the worst losers. VCB of Vietcombank was down 3.9 percent, CTG of VietinBank, 2.3 percent, BID of BIDV, 2.1 percent, and MBB of mid-sized Military Bank, 0.7 percent.

Other poor performers incuded HPG of steelmaker Hoa Phat Group, down 3 percent, VJC of budget carrier Vietjet Air, 2.7 percent, and PLX of gasoline distributor Petrolimex, 2.6 percent.

VIC of private conglomerate Vingroup, HoSE’s biggest capped stock, shed 2.1 percent. Its two subsidiaries, VRE of mall operator Vincom Retail and VHM of real estate developer Vinhomes were down 2.5 percent and 1.7 percent respectively.

"Cash will continue to rotate through different groups of stocks to seek profits. Investors may want to consider holding onto their shares but reducing short-term positions in sessions with strong movements from the get-go," brokerage Bao Viet Securities said in their latest report, forecasting that the VN-Index could still hit 1,100 points.

Meanwhile, both the HNX-Index for the Hanoi Stock Exchange, home to mid- and small-caps, and the UPCoM-Index for the Unlisted Companies Market seemed unaffected by developments on the main market, with respective gains of 0.22 percent and 0.06 percent.

Foreign investors continued to be net sellers to the tune of VND778 billion on all three bourses. The most net sold stocks were HPG of Hoa Phat Group and CTG of VietinBank.