Vinamilk fall extends stock market gloom

Vietnamese shares fell further yesterday, driven down by dairy firm Vinamilk while foreign investors remained net sellers for six consecutive sessions. - VNA/VNS Photo

The benchmark VN Index on the HCM Stock Exchange dropped 0.4 per cent to finish at 661.28 points. The southern market index has fallen 2 per cent in the last four sessions.

The HNX Index on the Ha Noi Stock Exchange retreated 0.2 per cent to end at 84.22 points after rising 0.4 per cent during the previous two trading days.

"Continuous downward trend of large-cap stocks such as dairy firm Vinamilk (VNM) kept local market in the negative territory from the beginning of the day," Bao Viet Securities Co (BVSC) wrote in its daily report.

Dairy firm Vinamilk (VNM) continued to suffer from foreign selling as foreign investors sold nearly 2.8 million shares during the session worth VND294 billion (US$13 million).

Some of the 2.8 million Vinamilk's shares sold by foreign investors could come from Amersham Industries Ltd and Grinling International Ltd, which are the members of the HCM City-based investment fund Dragon Capital Group Ltd, BVSC said.

The two foreign shareholders last Thursday registered to sell 4.5 million shares of Vinamilk within one month from yesterday.

"The two funds' sell orders could only mean regular profit-taking and proved that Vinamilk has become profitable enough for investors after a sharp gain in the last two months," BVSC said.

"If foreign investors continue to withdraw from Vinamilk over the coming days, VNM shares would send the market down deeper as the largest stock by market capitalisation."

VNM had jumped more than one-third to hit the highest price ever of VND156,000 per share at the end of August. The share closed down 2.7 per cent to drop total 6.4 per cent within the last four days.

Steel maker Hoa Sen Group (HSG) yesterday lost 0.9 per cent on public concerns that its new steel plant in the central province of Ninh Thuan would cause environmental damages to the coastal region. HSG has declined 2.9 per cent after two days.

Foreign investors yesterday recorded a net sell value of more than VND263 billion - marking the sixth trading day as net sellers on the stock market.

Yesterday, the central bank cut its daily reference mid-point rate for local foreign-currency trading by VND5 to VND21,917 for a US dollar as weak data from the country's services sector reduced chance for an interest rate hike this month, bringing the dollar down against other currencies.

Trading liquidity was slightly down from Tuesday with more than 142.5 million shares worth VND3.3 trillion.