HANOI: Shares declined yesterday after a two-day rally as momentum fueled by generally positive third-quarter earnings began to peter out. On the HCM City Stock Exchange, the benchmark VN-Index lost 0.8 per cent to close yesterday at 602.8 points. It increased 1.9 per cent in the previous two sessions. On the smaller exchange in Ha Noi, the HNX-Index decreased 1.4 per cent to finish at 81.1 points, erasing gains from the last two days.
“Many companies have now posted their third-quarter earnings,” said Bui Nguyen Khoa, a stock analyst at BIDV Securities Co. “This has prompted investors to sell shares to lock in profits on fears that the market may lack a catalyst in the short term to push the market higher.”
Large-cap shares were the biggest decliners, including dairy giant Vinamilk (VNM), insurer Bao Viet Holdings (BVH), real estate developer VinGroup (VIC) and private equity Masan Group (MSN).
Vinamilk, Viet Nam’s largest dairy producer as well as the biggest stock by market capitalisation, has climbed over 17 per cent in the past one month and Khoa said many investors started to sell out after the company reported its third-quarter earnings.
Vinamilk decreased 0.9 per cent for a second consecutive session, closing yesterday at VND117,000 (US$5.22) per share. The dairy firm on Thursday posted net sales of over VND10.5 trillion ($469 million) in the last quarter, up 20.5 per cent year-on-year. Its net profit reached over VND2.1 trillion ($94 million), up 55.2 per cent during the period.
Ending September, Vinamilk earned a total of nearly VND5.9 trillion ($263.4 million) in net profit, up 35.4 per cent year-on-year. Other large-cap stocks have increased substantially in October, like Bao Viet (up 27.4 per cent) and VinGroup (up 10.6 per cent) which also faced strong selling pressure. BVH tumbled 3.3 per cent yesterday while VIC fell 1.1 per cent.
“The VN-Index could retreat to around 600 points in the coming sessions if selling forces continue to rise,” Khoa said. The overall market condition was negative with nearly 16 per cent of 678 stocks advancing while up to 47 per cent declined.
Liquidity rose slightly with the trading volume up 29.5 per cent from Friday to 166.3 million shares in the two markets, but the value of trades was up just 4 per cent to reach VND2.6 trillion ($116.1 million).
Ocean Group (OGC), a financial investment firm, was the most active nationwide yesterday with nearly 18 million shares traded and its price decreased by the daily limit of 7 per cent to just VND2,700 ($0.12) a share, ending the five-day rally. The share price has soared almost 21 per cent in the past five days after the company estimated its third-quarter profit reached over VND1.64 trillion ($73.2 million), completing its yearly target.
