Vietnam stocks plunge with Brexit vote
Vietnamese shares dove on June 24’s morning and then climbed slightly as investors reacted in shock to Britain’s decision to terminate its membership in the European Union (EU).
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The benchmark VN Index ended at 620.77 points, down 1.8% from June 23, after plunging more than 5% earlier – the worst drop since January 28.
The HNX Index on the Hanoi Stock Exchange fell 2% – the steepest decline since January 7 – to finish at 83.62 points, pulling back from a four-day rally of 1.7%.
“Investor confidence fell very low after voting results revealed the UK chose to leave the EU, creating one of the strongest sell-offs ever on global stock markets,” Saigon-Hanoi Securities Corp (SHS) reported.
The strong sell-off resulted in the highest market trading liquidity in the last two years, SHS said. Investors exchanged more than 380.7 million shares worth VND6.13 trillion (US$272.5 million).
The final Brexit voting results also pushed British sterling down to a 31-year low against the US dollar. The sterling also became weaker against the Vietnamese dong. The exchange rate between the sterling and the dong fell 6% at Vietcombank to VND31,320.49 for a sterling.
Meanwhile, the exchange rate between the dollar and the dong remained nearly flat. The central bank’s daily reference midpoint rate eased to VND21,845 for a dollar, versus June 23’s value. The central bank said it would keep a close watch on the market to make appropriate adjustments to the exchange rate.
Gold prices on the local exchanges also saw gains. For example, each tael of the Saigon Jewelery Joint Stock Company reached a value of VND35.9 million, before closing between VND35.2 million and VND35.5 million, an increase of 3.8-4.7% over June 23’s values.
Lower investor confidence pulled most sectors down. Sectors that witnessed the strongest declines included the insurance, energy, brokerage and banking sectors.
All blue chips were down. Insurer Bao Viet Holdings (BVH) slumped 3.3%, dairy firm Vinamilk (VNM) dropped 2.1%, consumer goods producer Masan Group (MSN) slid 2.2%.
Among the banks, Vietcombank (VCB) and Vietinbank (CTG) lost 2.5% and 2.9%, the Bank for Investment and Development of Vietnam (BIDV) and Saigon -Hanoi Bank (SHB) slipped 1.7% and 3.2%.
The largest securities firms on the stock market suffered heavily from low investor confidence. Saigon Securities Inc (SSI), HCM City Securities Corp (HCM), Saigon-Hanoi Securities Corp (SHS), and VNDirect Securities Corp (VND) plunged between 2.4-5.8%.
“As global markets are connected closely to each other, Vietnam’s stock market will likely continue to suffer more from the current low investor confidence in the world,” Bao Viet Securities said.
