Market corrects on profit-taking

Thursday, Apr 13, 2017 08:00

Shares slump on Wednesday after the benchmark VN-Index set new nine-year peak on Tuesday. — Photo

Shares fell on the two exchanges on Wednesday as investors booked short-term profits after the benchmark index set a nine-year new peak.

On the HCM Stock Exchange, the benchmark VN Index retreated to 725.58 points, down 0.8 per cent. The key index has gained nearly 10 per cent this year.

On the Ha Noi Stock Exchange, the HNX Index also decreased 0.8 per cent to close at 89.91 points. The northern market index has expanded more than 14 per cent since 2016.

Large-cap shares fell under selling pressure when 22 of the 30 largest stocks by market value and liquidity dropped.

Losers include banks, insurers, steel and plastic manufacturers, consumer product companies, oil and gas firms and real estate developers.

Realty shares were hit hard after discrepancies in earnings reports by some real estate companies decreased investor confidence.

Net profits of Tan Tao Investment Industry Corp (ITA) shrank from VND54 billion (US$2.4 million) to VND39.2 billion in 2016, equivalent to a 28 per cent decrease after auditing.

ITA shares suffered an eighth straight losing session on Wednesday, closing at about VND3,000 a share, a loss of 26.3 per cent.

Hoang Quan Consulting Trading Service Real Estate Corp (HQC) also posted lower net profit in 2016 after auditing, falling from nearly VND112 billion to just VND19.6 billion. HQC shares sank 5 per cent in the morning trade but bounced back to the reference price of VND2,340 a share.

Negative spillover spread to big property companies such as VinGroup (VIC), Kinh Bac City Development (KBC), Vinh Phuc Infrastructure Development (IDV) and Construction Joint Stock Company No 3 (VC3).

On the other side of the fence, the recovery of Vinamilk (VNM), Vietjet Air (VJC) and software producer FPT Corp (FPT) cushioned the market.

“Q1 earnings have gradually been reflected in stock prices and the market may see a temporary information gap,” analysts at FPT Securities Co wrote in a report.

They urged attention to movements of financial stocks as this group often reflected market trends.

Liquidity rose slightly from Tuesday’s figures with nearly 304 million shares worth a combined VND4.9 trillion (roughly $215 million) traded in the two markets. – VNS

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