VN-Index suffers biggest lost since Q1/2020, liquidity hits record

Wednesday, Jan 20, 2021 06:56

A BIDV branch in Ha Noi. BIDV was among blue chips hitting the floor price yesterday. — VNS Photo Mai Huong

Shares bounced back slightly in the afternoon trade but the VN-Index still lost 61 points, or 5.11 per cent, closing Tuesday at 1,131 points.

This was the biggest daily retreat of Viet Nam’s benchmark since the first quarter of 2020 and the second falling day this week. It inched down just 0.2 per cent on Monday.

On the Ho Chi Minh Stock Exchange, overall market breadth was pessimistic with 394 stocks falling, only 42 rising and 39 closing flat.

Blue chips were the main drag when all of the top 30 largest shares by market value and liquidity (VN30) plummeted, of which eight hit the floor price of a 7-per-cent drop. All of them were banks and financial companies including BIDV (BID), Vietinbank (CTG), Military Bank (MBB), VPBank (VPB), Sacombank (STB), Ho Chi Minh Development Bank (HDB), Saigon Securities Inc (SSI) and Hoang Huy Investment Financial Services (TCH).

Except Vincom Retail (VRE) rebounding near the reference price by the end of the session, others lost more than 2 per cent.

Liquidity hit a record of more than 986 million shares worth VND20.4 trillion (US$879.3 million), up 19 per cent in volume and 32 per cent in value compared to Monday’s figures.

According to MB Securities Co (MBS), the fact that many stocks in the VN30 dropped was a bad sign which was driven by surging profit-taking pressure from investors, especially who use high leverage to buy stocks and stock prices had increased fervently in the recent uptrend.

Besides, many attempts to make sell orders of investors were blocked due to the stock exchange’s systematic problems while investors tried to cash in at all costs.

Before Tuesday’s session, the VN-Index rose nearly 8 per cent since early January. Looking back to 2020, the market was on an uptrend since August and the VN-Index has gained nearly 50 per cent from 798 points seen on August 20 to 1,191 points on Monday.

MBS analysts reckoned pessimistic trading on Tuesday would take the market some time to stabilise and recover and the VN-Index may retest the support zone of 1,033-1,064 points before another strong recovery appears.

“Normally, fast and steep declines will not last long but only 1-2 sessions. Stocks that were sold at the floor price will soon bounce back as soon as the market is stabilised,” they wrote in a market report.

On the Ha Noi Stock Exchange, the HNX-Index decreased 2.81 per cent to end at 224.02 points.

Nearly 281 million shares worth VND4 trillion were exchanged in the northern market.

Thus, the total trading value on the two exchanges reached VND24.4 trillion, or more than $1.1 billion on Tuesday.

Foreign investors were net buyers in the two markets with total net buy value of VND140 billion. — VNS

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