The stock market saw a decline for the third consecutive trading session on July 12 with the weakening of the ‘pillar’ shares on the bourse, including bank, finance and retail shares.

The VN-Index decreased by 3.05 points to 1,280.75 points late last week. Prior to that, the index kept inching up, nearly hitting the 1,300 point threshold on July 9 thanks to demand from domestic individual investors.

Many blue-chips sold strongly and continued weakening. However, some stocks unexpectedly saw prices soaring, including three shares belonging to the so-called ‘Vin family’ – Vingroup (VIC), Vinhomes (VHM) and Vincom Retail (VRE).

VIC share price soared by another VND650 to VND41,750 per share. FPT of FPT Corporation, VJC of Vietjet, GVR and POW also surprised investors when increasing unexpectedly.

With the price increase of Vinfast (VFS) shares of the Vietnamese electric automobile manufacturer, by 17.5 percent on Nasdaq on July 11 to $4.9 per share, Vuong’s stock assets increased by $100 million, or VND2.5 trillion, to $4.2 billion.

There has been no news related to VinFast recently, and the prices of the shares have been hovering around $4-4.5 per share.

International media reported that VinFast is seeking a loan worth $250 million from Indonesian banks to build an assembly factory in the country. Prior to that, on June 27, VinFast held the annual shareholders’ meeting, which appointed Nguyen Thi Lan Anh as a member of the board of directors. There are six members of the board: Pham Nhat Vuong, Le Thi Thu Thuy, Ling Chung Yee Roy, Tham Chee Soon, Nguyen Thi Van Trinh and Nguyen Thi Lan Anh.

Though VIC price has soared in the last two trading sessions, it is still at its 7-year low. VIngroup’s current capitalization is VND160 trillion ($6.3 billion). 

Some other shares are at historical peaks.

On July 8, FPT shares reached an all-time high at VND139,600 per share and its capitalization reached VND204 trillion ($8 billion). This was a strong breakthrough made by the technology giant in the last five years. In April 2019, when Vingroup’s capitalization value climbed to VND370 trillion, FPT’s capitalization was less than VND29 trillion.

REE, the shares of a refrigeration engineering company, one of the oldest veterans on the bourse, also saw a price increase last week. On July 11, REE was traded at VND71,500 per share. The share price has increased by 50 percent so far this year.

VN-Index down despite good news

The VN-Index decreased at the last trading session of the last week, despite good news, including the prediction about the dollar depreciation in the time to come as a reaction to the changes in US FED president Jerome Powell’s statement made in a hearing before the US House of Representatives on July 10.

Powell stated that the FED would not wait until inflation falls to the targeted level of 2 percent to start cutting interest rates. The statement represents a new view compared to  forcing the inflation rate to below 2 percent before.

The Japanese yen has made a jump with the price increasing by 2.7 percent to the 2-year high compared with the greenback just within one trading session. Some other currencies have also appreciated against the US dollar.

Analysts commented that Powell’s statement indicates the interest rate cut is expected soon. As of July 12, according to CME FedWatch, which acts as a barometer to gauge the markets expectation of potential changes, 96.2 percent market participants believe the FED will cut interest rates at the upcoming September 18 meeting.

The US dollar is predicted to enter a depreciation period as the signal about interest rate cuts from the FED has become clear. As of 9pm July 12, DXY, which measures the fluctuations of the greenback against six key currencies, had dropped to 104.2 points from 105-106 points in late June.

Vietnam’s macro economy is in good condition with a GDP of 6.93 percent in the second quarter, higher than predicted, high exports, and a record high FDI (foreign direct investment) disbursement.

However, the bad news is that foreign investors continue to sell Vietnamese stocks. Foreign investors’ net sales on July 12 reached VND777 billion, while the figure reached $2 billion after the first six months of the year.

Manh Ha