The Business Times

Forced selling makes Vietnam stocks world’s worst performer

Published Fri, Oct 7, 2022 · 07:58 PM

Vietnam’s stocks tumbled to the lowest in almost two years as a wave of forced selling hit the market amid concerns about rising interest rates.

The VN Index slid as much as 4.9 per cent to the lowest since January 2021, with the Bank for Foreign Trade of Vietnam and PetroVietnam Gas among the biggest drags. The benchmark has declined 18 per cent over the last one month to rank as the world’s worst-performing major gauge.

Sentiment towards Vietnamese equities has soured after the central bank raised two policy rates by one percentage point each last month to curb inflation. Investors were also rattled after the Vietnamese dong slid to an all-time low this week amid continued strength in the US dollar.

“Margin call pressure has forced investors to sell off recently and the panic among investors hasn’t come to an end yet,” said Phung Trung Kien, founder of asset management firm Vietnam Holdings. “Cash flow to the market has been quite limited these days as most of the important interest rates such as interbank interest rates have been increasing a lot.”

Outflows are also exerting pressure, after overseas investors sold Vietnamese shares for seven straight weeks to bring withdrawals so far this year to US$95 million.

“Retail investors are extremely panicky, and they are taking flight without regard for which stocks they are selling,” said Nguyen Anh Duc, head of institutional sales at SSI Securities Corp. BLOOMBERG

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