Vietnam Daily Market Recap August 5, 2024

Market Commentary: When there is blood in the streets…

The VN-Index plunged on Monday, closing down 3.9%, or 48.5 points, the largest decrease since April 15, to reach 1,188.07, the lowest level since April 23. 91 stocks hit their floor prices. The HNX also dropped 3.8%, or 8.8 points, to 222.7.

Today’s losses were driven by news from the US that non-farm payrolls fell significantly short of expectations so that the risk of a US recession increased. (See our Macro Note). In response to this news, equity markets fell around the world. The Nikkei fell 12.4%, its largest percentage decline since October 1987. US treasury bonds rallied in a flight to safety. There was no Vietnam domestic news to prompt today’s panic selling. In fact, the news increased the likelihood of two rate cuts this year from the US Fed, which would be very positive for Vietnamese equities. Today’s sell-off therefore seems like an excellent buying opportunity. We may see continued selling tomorrow on weak sentiment, but the economic fundamentals of a weak US dollar leading to lower interest rates – in both the US and in Vietnam – should be supportive over the medium term.

No sectors gained today. Banks (-3.6%) led the sell-off, led by BID (-3.5%), TCB (-5.1%), CTG (-4.4%), VPB (-3.2%), VCB (-2.0%), and HDB (-6.1%). Financial Services (-5.1%), Industrial Goods & Services (-5.4%), Real Estate (-3.6%), Basic Resources (-4.3%), Construction & Materials (-3.6%) also witnessed considerable decreases.

Basic Resources fell -4.3%, including steel stocks HPG (-4.8%), HSG (-6.8%), and NKG (-7%) as a result of the lowest steel rebar price in eight years amid weak demand in China, and Vietnamese steel products being at risk of being included in an anti-dumping investigation by the European Union.

Foreign investors net sold VND750bn (USD29.8mn) today. The selling momentum focused on HPG (VND231bn, USD9.2mn), FPT (VND88bn, USD3.5mn), MWG (VND80bn, USD3.1mn) and STB (VND78n, USD3.0mn). Foreigners net bought VNM (VND192bn, USD7.6mn) and VCB (VND94bn, USD3.7mn).

Top laggards today included VCB (-2.0%), BID (-3.5%), GVR (-7%), TCB (-5.1%), HPG (-4.8%), and CTG (-4.4%), which dragged an aggregate 12.9 points off the VN-Index. Conversely, top gainers included HNA (+3.8%), SVC (+6.3%) and EIB (+0.3%).

Read our full report: HERE