Rally ends after earnings season comes to a close

Thursday, Oct 22, 2020 06:59

The front view of the Ho Chi Minh Stock Exchange in HCM City. — Photo tinnhanhchungkhoan.vn

Vietnamese shares retreated from an eight-day rally yesterday as investors looked to sell after the earnings season ended.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange lost 0.57 per cent to 939.03 points after having gained as much as 0.4 per cent during the day.

The VN-Index put an end to its eight-session rally, in which it made a total gain of 2.78 per cent between October 9 and October 20.

The growth of the index slowed in the previous three days.

All three indices tracking stocks by market capitalisation declined on Wednesday.

The large-cap tracker VN30-Index fell 0.37 per cent to 906.10 points. On Wednesday, the VN30 futures due on November 19 was down 0.29 per cent to 908.50 points.

The mid-cap and small-cap trackers tumbled 1.24 per cent and 0.68 per cent, respectively.

The market was dragged by financial-banking stocks after some large-cap firms in the sector released third-quarter earnings reports.

Vietcombank (VCB) lost 1.7 per cent, Vietinbank (CTG) plunged 3.3 per cent, insurer Bao Viet Holdings (BVH) tumbled 3.7 per cent and TPBank (TPB) declined by 2.5 per cent.

The four largest securities firms SSI Securities (SSI), HCM City Securities (HCM), VNDirect Securities (VND) and VietCapital Securities (VCI) all declined.

In the third-quarter financial report, Vietcombank said post-tax profit fell a fifth year-on-year to nearly VND4 trillion and total bad debt rose 36 per cent in nine months to nearly VND7.9 trillion.

TPBank reported post-tax profit gained 26 per cent year-on-year to VND792 billion, but total bad debt increased by 60 per cent after nine months.

Among the four brokerage companies, only VietCapital Securities recorded a decline in third-quarter earnings. The firm earned VND95.5 billion in post-tax profit in July-September, down 37 per cent year-on-year.

Other sectors that also were hit by increased selling included technology, retail, mining and energy, seafood processing, agriculture-aquaculture-forestry and materials.

The market declined as blue chips suffered from the increase of profit-taking, Thanh Cong Securities (TCSC) said in its daily report.

“The VN-Index really struggled with the 945-point level,” TCSC said. “The decline may extend in coming days and stocks will be divided on their third-quarter earnings.”

But liquidity being lower than the 20-day average indicated the pressure was not too harsh on local stocks, Sai Gon-Ha Noi Securities (SHS) said in a note.

“What pushed the market down was profit-taking as the market has nearly reached the pre-pandemic level,” SHS said.

The closest support level for the market now is 925 points, the two companies forecast.

On the Ha Noi Stock Exchange, the HNX-Index slid 0.25 per cent to 139.98 points.

The northern market index has decreased by a total of 0.65 per cent in the last two days. — VNS

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