Vietnam Stocks Trade Thinly as VN-Index Falls 0.7%

Vietnamese stocks weakened on November 12, with the VN-Index falling 12.15 points, or 0.7%. About 30% of stocks that traded fell by 1% or more. Average daily turnover on the two exchanges this week was about VND 11.5 trillion, excluding negotiated trades, leaving the market’s recovery without support from trading volume.

Illustration of trading in Vietnam’s stock market.（VietVance）

Large-cap stocks failed to support the index. None of the 10 stocks with the greatest influence on the index rose; BID, VPB, MBB, HPG and GAS each fell by more than 1%. Turnover among VN30 constituents was about VND 5 trillion that day, down 33% from last week’s average. Average turnover over the first four trading days of this week was also down about 28%.

The total volume of buy orders placed in the first four trading days of this week was 12% below the average for the first week of November. The author argues that weaker buying interest is a major reason the market has been drifting. A rally on November 4 failed to bring a sustained rise in trading volume; the author sees limited short-term trading opportunities during the lull in news following third-quarter earnings reports.

While spot-market trading was subdued, trading volume in the F1 stock index futures contract rose nearly 30% from the previous day to its highest level in six trading sessions. At one point, F1 traded at a discount of more than 13 points to the VN30 Index before the gap narrowed rapidly. The VN30 Index closed at 1839.43 points; the author listed 1850 as the nearest resistance level for the next day and 1835 as a support level.

Source: VietVance