Banks, insurers drag markets down again

Wednesday, Nov 18, 2015 08:00

Staff at Ha Noi Stock Exchange check-up and supervise the results of a Government bond auction. — VNA/VNS Photo Hoang Hung
HA NOI (Biz Hub) — Shares declined for a second day yesterday as France's anti-terror strategy continued to weigh on bank and insurance shares.

On the HCM Stock Exchange, the benchmark VN-Index lost 0.7 per cent to close at 605.1 points. It was down 0.3 per cent on Monday.

"Now is not a good time for the global equity markets as well as Viet Nam," Nguyen Ngoc Thach, an analyst of Saigon Securities Inc said.

Thach said the terror attacks in Paris forced France to enter a war with the terrorist Islamic State and destabilise the European economy.

"A proportion of economic resources which should be invested in boosting production could be used to safeguard the national security. Central banks can also pump money to ensure liquidity and meet the needs of businesses and people," Thach said.

In the past, the US Federal Reserve (Fed) had injected US$100 billion a day for three days after the terrorist attacks on September 11, 2001 and an additional $90 billion through a currency swap programme.

"Selling risky assets seemed to be the automatic reaction of investors after the strategy and this could continue until they can measure the impact of this event," Thach said.

Banks and insurance companies led the market downturn yesterday.

Five of the nine listed banks lost value, with Military Bank (MBB) being the biggest loser with a 1.4-per cent decrease while others like Bank for Investment and Development of Viet Nam (BID), Eximbank (EIB), Vietinbank (CTG) and Asia Commercial Bank (ACB) inched down by less than 1 per cent.

Among the seven publicly-traded insurers, four slumped, two closed unchanged and only one gained.

Viet Nam National Reinsurance (VNM) lost over 3 per cent while Bao Viet Holdings (BVH) slipped 1.8 per cent, and BIDV Indurance (BIC) and PVI Holdings (PVI) decreased 1.4 per cent and 1.2 per cent, respectively.

Vinamilk (VNM), Viet Nam's biggest dairy producer as well as the biggest listed company, also lost 4.3 per cent yesterday after a five-day rally. The shares rose 10.2 per cent in the past five days.

At the other end of spectrum, energy stocks rebounded. The biggest energy firm PV Gas (GAS) increased over 0.9 per cent while others such as PetroVietnam Drilling and Well Services Corporation (PVD) and PetroVietnam Southern Gas (PGS) advanced 2.5 per cent and 1.6 per cent, respectively.

By contrast, on the smaller exchange in Ha Noi, the HNX Index recouped 0.1 per cent to end at 81.1 points after going down 0.6 per cent on Monday.

The overall liquidity increased with a total of 237 million shares worth VND3.5 trillion ($156.3 million) being traded in the two markets yesterday, up 25.4 per cent in volume and 8.4 per cent in value over Monday's levels. — VNS

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