Vietnam stock market set to be world’s worst in April

By Staff reporters   April 27, 2018 | 05:20 am PT
Vietnam stock market set to be world’s worst in April
An investor monitors share prices on an electronic board at a local securities trading floor in Hanoi. Photo by AFP
More than $15 billion has been wiped of the market this month following an all-time high.

Vietnam, Asia’s top stock market so far this year, is set to become the world’s worst performer this month, according to Bloomberg.

The benchmark VN-Index slid 3.2 percent at the close on Thursday as trading resumed after a holiday on Wednesday, with foreign investors unwinding their positions in emerging markets aand rushing to exit a market that reached a record about two weeks ago.

“There is a lot of foreign selling today and clearly the market is on a down trend and it is really pushing some margin calls,” Michel Tosto, the Ho Chi Minh City-based head of institutional sales and brokerage at Viet Capital Securities, said by phone.

Thursday’s fall brought the drop so far in April to 11 percent, on course for its worst monthly performance in seven years. The decline wiped off more than $15 billion from the nation’s market capitalization.

The plunge in the stock market is attributed to rising U.S. treasury yields and a stronger dollar that have prompted foreign investors to trim holdings in emerging market equities.

The initial public offering (IPO) bonanza in the country could also be another reason behind the selloff as investors divest current holdings to use capital for the upcoming IPOs, Joshua Crabb, head of Asian equities at Old Mutual Global Investors AP Ltd. said by phone.

Vietnam has taken the lead in Southeast Asia ahead of Singapore, Thailand, Malaysia, Indonesia and the Philippines by raising $6 billion from IPOs, according to Bloomberg data.

Vietnam Technological and Commercial Joint Stock Bank (Techcombank) is set to price its global equity offering at the top end of an indicative range, raising roughly $922 million and marking the country’s biggest-ever IPO, according to Reuters.

"IPOs are coming in at slightly cheaper valuations to some and with better growth prospects,” said Crabb.

Driven by an improving economy and foreign investment giants, Vietnam’s stock exchange has outperformed the rest of Asia this year, with the VN-Index climbing 22 percent to a record on April 9, extending a 48 percent rally in 2017.

The VN-Index, a capitalization-weighted index of all the companies listed on the Ho Chi Minh City Stock Exchange, closed at 1,050 on Friday.

The index closed at 1,120 on February 28, up a staggering 14 percent from the beginning of the year, which was the biggest gain worldwide.

On the last working day of 2017, it closed at a 10-year high of 984.24, earning Vietnam the nickname Asia’s “frontier market”.

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