VINACHEM

When the VN Index exceeded the 1,200 point threshold, it was a surprise that the stock market later fell so sharply.

With closing at 900 points on July 5, the VN Index dropped by 25 percent, a sign showing that Vietnam has fallen into a bearish market.

Even bank shares, called ‘King shares’ because of their attractiveness, have also seen prices decrease by tens of percent. It was the bank share price falls which forced the VN Index to plunge and turned Vietnam into the sharpest falling market in the globe.

Vietcombank share prices dropped by 30 percent from the peak of VND75,000 per share, with BIDG by 50 percent, SHB 49 percent, VietinBank 45 percent, VP Bank 41 percent, ACB 40 percent and MBBank 27percent.

The bank share price fell despite the satisfactory business results reported by the banks and predictions about their business performance this year. Analysts believe that bank shares were overvalued, which led to a profit-taking wave when investors, both domestic and foreign, rushed to sell bank shares.

As for insurance and securities companies, HSC price decreased by 44 percent, SSI 39 percent, Ban Viet 36 percent, while VN Direct and SHS fell by 51 percent from the peak price.

Among real estate shares, LDG Investment JSC saw the sharpest decrease, by 55 percent which sometimes dropped to below the nominal value of VND10,000. Dat Xanh Group, a big shareholder of LDG, also saw the share price drop by 34 percent.

The shares of construction and building material companies become weaker when real estate shares drop.

After reaping fruits in 2017 and the first three months of 2018, investors once again after 10 years tasted the ‘bitterness’ of the market.

The stock market bounced back on July 6. However, analysts say it would be difficult to regain the peak price.

The GDP growth in the second quarter of the year slowed down. Inflation and exchange rates are uncertain.

The Ministry of Finance proposed raising taxes and setting new kinds of fees to restructure revenue of the state budget.

Meanwhile, the State Bank of Vietnam has been advised to tighten monetary policy again to serve the priority task – stabilizing the macro economy.

The VN Index decreased by another 7.79 points in the last trading session of the July 8-13 week, closing at 909.72 points. The index drop has ‘blown’ stock billionaires’ away.

Only Trinh Van Quyet of FLC and Ho Xuan Nang of Vicostone saw their assets increase. The former now has VND17.635 trillion worth of stocks, an increase of VND1.261 trillion, while the second has VND11.029 trillion, up by VND1.239 trillion. - VNN -