Shares drop, led by car dealers

Investors at the Saigon Securities Incorporation. The VN Index yesterday fell 0.2 per cent to close at 610.6 points. - VNS Photo Doan Tung

The VN-Index on the HCM Stock Exchange retreated 0.2 per cent to close at 610.6 points after nearing 618 points earlier in the morning session. The Index advanced 1.5 per cent on Tuesday.

On the Ha Noi exchange, the HNX-Index also lost 0.2 per cent to end the session at 81.7 points after rising 1 per cent in the previous session.

The market condition was negative with 26 per cent of 680 trading stocks increasing while 34 per cent declined.

Auto dealers were the biggest losers.

TMT Automobile Co (TMT), Truong Long Auto & Technology Co (HTL) and Hang Xanh Motors Service Co (HAX) all dropped by the daily limit of 7 per cent for a third straight day while Hoang Huy Investment Services Co (HHS) and Saigon General Service Corp (SVC) fell 4 per cent and 2 per cent, respectively.

"Shares of auto distributors climbed substantially last week," said Nguyen Thanh Tung, an analyst at Royal Securities Company. "That prompted investors to sell to lock in profits."

Tung said that though earnings of these companies have been good and there is still room for these shares to advance higher, they may face correction pressure in the short term before going up again.

Truong Long Auto soared 26 per cent last week while Hang Xanh Motors, TMT Automobile and Saigon General Service all increased around 20 per cent.

From the beginning of the year through October 29, the price of Truong Long Auto soared 746 per cent. Other auto companies have jumped between 230 per cent and 430 per cent since the beginning of this year.

The nine-month earnings reports of auto distributors were positive. Through September, Truong Long Auto posted a net profit of VND102 billion (US$4.6 million), up 450 per cent year-on-year. TMT Automobile, Saigon General Services and Hoang Huy Investment Services also reported strong rises in nine-month profits between 200 per cent and 620 per cent over the same period of last year.

Other large-cap stocks also slumped yesterday, including Bank for Investment and Development of Viet Nam, Vietinbank, real estate giant VinGroup, software producer FPT Corp.

Liquidity increased with 174.5 million shares worth VND3.4 trillion ($151.8 million) were traded in the two markets, up 8 per cent in volume and 10 per cent in value over Tuesday's levels.