Vietnamese stocks crash following Brexit vote

By Bach Duong   June 24, 2016 | 02:11 am PT
The domino effect of net sales has caused the VN-Index to spiral by 34 points at one point, the biggest dip this year, while transactions climbed to a 2016 record of over VND6 trillion.

VN-Index has been held up by a large cash injection after the panic caused by the UK deciding to leave the European Union, but overall 500 codes still fell. VN-Index bounced back to finish trading 12 points down at 620, with losses also reported on the HN-Index and UPCoM.

Only a few stocks turned green including Mobile World Co. Ltd (MWG) that catapulted from VND7,000 ($0.31) to VND122,000 ($5.47). Kinh Bac City Development Holding Corporation (KBC), Vietnam Electric Cable Corporation (CAV) and Hoa An Co. Ltd (DHA) also recovered earlier losses.


Vietnam's stock market tumbled sharply today due to Brexit. Phot by Reuters/Jason Lee 

Trading on the HN-Index finished down two points at 83.5, while the UPCoM also slipped two points to 56.8 pts. The total transaction volume reached VND6.35 trillion ($285 million), the highest since 2015.

Large amounts of capital flowed into stocks with high Euro currency collateral, including Vicem Ha Tien Cement JSC (HT1) and PV Power NT1 (NT1). Other blue chips like Vinamilk (VNM), Vietcombank (VCB), Military Bank (MBB), Vin Group (VIC) and Saigon Securities Inc. (SSI) recovered gradually. But the trading day witnessed 67 shares touching the floor, including Hoang Anh Gia Lai (HAG), Vietinbank (CTG) and Bamboo Capital (BCG).

The announcement the United Kingdom is leaving the E.U. this morning (Vietnam time – GMT+6) triggered panic among Vietnamese and international investors. Following the downturn in the global market, Vietnamese investors raced to offload shares in huge quantities.

The HNX and HOSE tumbled from the morning session with blue chip stickers like VNM, VBC, Bao Viet Holdings (BVH ) leading to the strongest fall on the VN-Index this year, and what point down 34.5 points in the morning session.

A broker at SSI said the the market had been hit by Brexit with investor psychology following net sales across Asia.

Director of the Analysis Department at Viet Capital Securities JSC Nguyen The Minh said that investor psychology is negative and they are ready to cash out on shares following global market trends, and this is unlikely to stop in the immediate-term.

Minh said economic cooperation between Vietnam and the U.K. is in its opening stages, but the direct impact of Brexit is having a significant effect on international markets that is filtering down to Vietnam.

Even after signing a free trade deal with the E.U., experts claim that Vietnam has suffered less than its peers in the region including Hong Kong, Singapore and Japan.

Other Asian markets also saw runaway sales after the Brexit vote. As of 1:40 p.m. today (GMT+6), all main indices in Asia Pacific markets had lost value. The Shanghai Composite Index was down 1.1 percent, the Hang Seng Index (Hong Kong) was down 4.3 percent, the Nekkei 225 (Japan) spiralled 9.4 percent and the Kospi (Korea) was down 3 percent.

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