Shares of Phu Nhuan Jewelry (PNJ) staged a dramatic rebound on July 8 after four sessions of steep losses, with investors pouring more than VND1.3 trillion (about US$49.7 million) into the stock following a sharp sell-off linked to a diamond-smuggling investigation.

The rally came after PNJ shares had plunged more than 25% over four trading sessions, wiping out more than VND8.1 trillion (about US$310 million) in market value.

Heavy buying sparks sharp reversal

Trading on July 8 produced one of the Vietnamese stock market's most notable reversals in recent years.

Within seconds of the opening auction, investors committed roughly VND500 billion (about US$19.1 million) to purchase more than 10 million shares that had been offered at the daily floor price.

By the close, PNJ shares had risen 2.4% to VND52,000 (US$1.99) per share after opening the session at the daily lower limit.

The recovery followed three consecutive limit-down sessions. The stock had fallen from VND63,100 (US$2.41) to as low as VND47,250 (US$1.80), losing more than one-quarter of its value.

The sell-off was triggered after authorities arrested Dang Ngoc Thao, former Director of P-Lab, PNJ's wholly owned gemstone certification subsidiary, as part of an investigation into the alleged cross-border smuggling of more than 28,000 diamonds.

Trading volume reached a record high.

More than 25.6 million PNJ shares, equivalent to roughly 5% of the company's outstanding shares, changed hands during the session, with total trading value exceeding VND1.3 trillion (US$49.7 million).

The figure contrasted sharply with the previous three sessions, when selling pressure overwhelmed demand and only 2.7 million shares were traded in total.

Investor sentiment also received support after Cao Ngoc Duy, brother of PNJ Chairwoman Cao Thi Ngoc Dung, registered to purchase 300,000 shares, while the company announced plans to buy back its own shares.

Market participants noted that several Vietnamese stocks - including STB, MWG, HPG and SSI - have previously recovered strongly after periods of crisis.

However, analysts also pointed to examples such as NVL, where temporary rebounds were followed by renewed declines as underlying issues remained unresolved.

As a result, while PNJ's recovery may signal that panic selling has eased, investors say it remains too early to conclude that the stock has established a lasting bottom.

Focus shifts to business impact

Beyond the share price, investors are watching closely to assess whether the investigation could affect PNJ's reputation and business operations.

According to investigators, Dang Ngoc Thao allegedly issued new gemstone certification documents to legitimize the origin of smuggled diamonds.

The case has attracted widespread attention because P-Lab, which is wholly owned by PNJ, previously accounted for about 70% of Vietnam's diamond and gemstone certification market.

Authorities have not concluded that PNJ's retail jewelry business was involved in the alleged offenses.

Nevertheless, the investigation has raised concerns about confidence in gemstone certification and the broader PNJ brand.

PNJ has maintained that the case relates solely to the personal conduct of Dang Ngoc Thao and does not create legal liability for the company.

The company said it has strengthened oversight of P-Lab and established a special supervisory committee that includes two independent members of its board of directors.

At an investor meeting on July 6, Chairwoman Cao Thi Ngoc Dung said PNJ imports its diamonds from Thailand and Hong Kong using legally compliant documentation.

She also said P-Lab's role is limited to gemstone certification and that it is not involved in diamond trading.

Analysts remain cautious

While the company's statements and insider share purchases helped improve market sentiment, signs of caution remain.

Foreign investors were net sellers of approximately 4.6 million PNJ shares, worth more than VND220 billion (US$8.4 million), during the July 8 session.

Several securities firms have also tightened margin lending policies for the stock.

TCBS, together with several other brokerage firms, removed PNJ from its list of margin-eligible securities from July 9, while other firms reduced lending ratios as part of risk management measures.

Brokerage SSI Securities said short-term risks to PNJ's liquidity and business operations appear manageable.

However, it warned that the greatest risk is not an immediate decline in revenue or earnings, but potential damage to consumer confidence.

Diamond-related products account for approximately 33% of PNJ's jewelry revenue, including 10% from loose diamonds and 23% from diamond jewelry.

SSI has therefore lowered its forecast for PNJ's 2026 net profit to VND3.333 trillion (US$127.5 million), down from its previous estimate of VND3.569 trillion (US$136.5 million).

The brokerage added that it is still too early to establish a reliable valuation or target price for PNJ shares while the investigation remains ongoing.

PNJ, for its part, said business operations continue as normal and reaffirmed its previously approved revenue and profit targets for 2026.

Vietnam's largest jewelry retailer reported 2025 revenue of more than VND35.4 trillion (US$1.35 billion) and net profit of VND2.828 trillion (US$108 million). As of the end of the first quarter of 2026, the company reported total assets of nearly VND19.7 trillion (US$753 million).

Manh Ha