Vietnam stocks achieve relative calm after turbulent Q2

By Minh Nga   September 4, 2018 | 03:17 pm GMT+7
Vietnam stocks achieve relative calm after turbulent Q2
An investor monitors share prices on an electronic board at a local securities trading floor in Hanoi. Photo by AFP

The volatility seems to have ended in the Vietnamese stock market, and it has been rising for several weeks now.

The 30-day volatility in the benchmark VN-Index at the Ho Chi Minh Stock Exchange (HOSE) has fallen to the lowest level since last November.

The economic turbulence of the past few months “is over” with the prospect of an escalating trade war encompassing Vietnam becoming more “remote,” Bloomberg quoted Michel Tosto, head of institutional sales and brokerage at Viet Capital Securities, as saying.

Inflation is expected to be contained and the currency has become more stable, he added.

“All this has brought a sense of calm to the market, and investor focus is again on earnings, which look solid for most companies,” he said. “Valuations are much more reasonable now, compared to the mid-March high.”

The benchmark VN-Index has rebounded over 10 percent from its July low. The gauge had plunged 18.19 percent in the second quarter of this year, making Vietnam the worst-performing market in the world.

It also marked the worst period for the market since the fourth quarter of 2008, when an economic crisis shook the world, including Vietnam.

But in the first three months of this year the VN-Index had risen 19.33 percent, the best performance by any market globally. It crossed the 1,200-point mark on April 9.

Then the fall occurred and has been struggling in the 900s since then.

In the last trading session of 2017, the stock market had hit a 10-year high, reaching 984.24 points. It had not broken the 800-point barrier since 2008.

In March, experts said the market was low-risk and investors were high on growth confidence.

Nguyen The Minh, a senior analyst at Saigon Securities Incorporation, had said then that “the VN-Index could reach 1,050 points in the short-term and 1,300 by the year’s end.”

RongViet Securities Corporation said the VN-Index will increase by at least 17 percent this year – 67 percent in a best-case scenario – meaning it could end the year somewhere between 1,170 and 1,640.

On Tuesday, the VN-Index dropped 13.6 points, or 1.37 percent, to around 975.

Despite its expectations of a short-term market boost, the Bao Viet Securities Company (BVSC) said that it could drop further around 970-975 points.  In such a scenario, BVSC analysts said it would more difficult for the market to bounce back.

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