The State Bank of Vietnam's Aug. 18 decision to depreciate the dong by
another 2 percent accelerated the downward slide of shares on both
national stock exchanges on the same day, with nearly 80 percent of
codes shedding value despite an overnight rise on Wall Street.
The depreciation of the dong from 18,544 VND to 18,932 VND per US
dollar was part of an effort to control the nation's trade deficit, the
State Bank said.
In response, the VN-Index lost 1.73
percent to close at 455.49 points, while the value of trades on the HCM
City Stock Exchange fell 7 percent to a one-month low of just 988
billion VND (51.2 million USD). Volume reached just 37 million shares.
Sacombank (STB), the most-active share on a volume of 1.87 million,
closed down 1.25 percent, while Vinh Son-Song Hinh Hydropower (VSH) fell
by 2.45 percent with 1.68 million traded.
On the
HanoiStock Exchange, the HNX-Index declined by 2.62 percent to end the
session at 132.62 points. Both volume and value dropped by 10 percent,
with only 26 million shares traded, worth a combined 651 billion VND
(33.7 million USD).
PetroVietnam Construction (PVX),
the most-active stock nationwide with a volume of 4.86 million shares,
declined by 3.8 percent, while Kim Long Securities Co (KLS) dropped by
3.23 percent on a volume of 1.5 million shares. Construction giant
Vinaconex (VCG) also plunged by 2.43 percent with 800,000 shares traded.
Pomina Steel (POM) was among few codes to post a
gain, hitting its ceiling price for the fourth straight day after
announcing its plans to buy back 9 million shares.
Several export companies which stood to benefit from the dong
depreciation also posted gains, including Long An Food Processing Export
(LAF), Ben Tre Forestry and Seafood Import-Export (FBT) and Sao Vang
Rubber (SRC).
PIV Petro Investment and Valuation Co
(PIV) saw its first day of trading on Aug. 18, closing up nearly 27
percent from its reference price to 20,300 VND (1.05 USD) per share,
with 36,000 shares changing hands.
Both stock
exchanges opened in positive territory but exhausted share demand
depressed most shares in the latter part of the trading day. More than
460 codes out of a total of 586 on both exchanges lost value.
Foreign investors were most immediately influenced by the currency
depreciation, decreasing buys to a net of just 34 billion VND (1.8
million USD) on both bourses, a decrease of 60 percent from the previous
session.
Tran Van Don, head of analysis department
for Ha Thanh Securities Co, said the State Bank decision reignited
investor worries about inflation.
"Many investors will
likely shift investment from risky and low profitable securities to
more attractive channels including foreign currency, gold or real
estate," Don said.
In addition, a number of investors
who had bought shares at depressed prices following last week's slump
were active in selling out again on the trading session, contributing to
the steep decline, he said.
Analysts of HCM City
Securities Co said the higher exchange rate would put pressure on
interest rates and the coupon rates of Government bonds./.
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