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Roundup: Vietnamese stock market slumps on impacts from Chinese market, adjustment of forex rate

Xinhua, January 7, 2016 Adjust font size:

Vietnamese stock market slumped on Thursday as being impacted from the halt of trading on Chinese market as well as the recent adjustment of foreign exchange rate.

Trading on China's Shanghai and Shenzhen bourses was halted Thursday morning after shares tumbled 7 percent within the first 30 minutes of trading, triggering the circuit breaker mechanism.

Following the falling on Chinese market, after 30 minutes of trading on Thursday morning, Vietnam's capital Hanoi stock index, HNX-Index, fell by nearly one point to the level of 77.72 points, a decrease of 1.22 percent compared to the previous trading day's closing session.

Meanwhile, within 30 minutes, the VN-Index, the benchmark of the southern Ho Chi Minh City's stock market, also decreased by nearly nine points from the level of 574.57 points on Wednesday closing, losing 1.5 percent.

The indexes continued to fluctuate during the trading day. In the afternoon, the HNX-Index even fell to the lowest level at 76.65 points on Thursday, losing 2.58 percent compared to the previous trading day's closing.

The VN-Index also experienced the lowest level of 561.37 points during the day, a decrease of 2.3 percent from the level when closing on Wednesday.

Ending the Thursday trading, HNX-Index closed at 77.15 points, down 1.53 points, or 1.95 percent, against the previous trading day's closing session.

At the same time, the VN-Index closed at 565.36 points, down 9.21 points, or 1.6 percent, against the previous trading day's closing session.

Most of large-cap shares on the two Vietnamese bourses were in red (losses) during the trading day.

Previously, the VN-Index posted three downs in a row before going up on Wednesday, while the HNX-Index also increased on Wednesday after two consecutive downs.

Also on Thursday, the State Bank of Vietnam (SBV) continued to adjust exchange rate between Vietnamese dong (VND) and U.S. dollar (USD) up by 12 VND per one USD. The SBV has implemented VND/USD inter-bank average exchange rate on a daily basis since Monday.

Do Bao Ngoc, a senior stock expert from MBS securities company, said on local media Thursday that the fluctuation of foreign exchange rate in recent days has also impacted Vietnamese stock market. The adjustment of Chinese yuan has left pressure on the VND.

In the past four days, the VND has been devaluated for three times. Compared to the rate before the new mechanism was implemented, the VND was devaluated by 0.13 percent.

Ngoc said the daily adjustment in the long term will impact the purchase of foreign investors on Vietnamese stock market.

Meanwhile, according to the Vietcombank securities company, as the risk from Chinese stock market remains huge, it will take time for the Vietnamese securities market to recover. Investors are advised to stay cautious and limit disbursement.

As many stocks are on falling trend, analysts also warned investors to be careful while going bottom-fishing.

On Thursday morning, trading on China's Shanghai and Shenzhen bourses was halted after the first 30 minutes of trading. It was the shortest trading time in China's capital market history.

This is the second time the circuit breaker has halted trading this week, after a similar plunge on Monday triggered the circuit breaker, the first day the mechanism took into effect. Endit