Vietnamese shares started the week lower, gripped by investor concerns over recent rumours about bans on a high-profile corporate leader, fuelling a sell-off focusing on large-cap stocks.

 

The VN-Index returned to trade below 1,160 points after about 80 minutes of trading with red dominating the board. Market breadth became negative with the number of losers more than double the number of gainers.

 

The VN-Index on the Hồ Chí Minh Stock Exchange dropped 1.69 per cent to end Monday at 1,151.50 points.

 

Market liquidity plunged with nearly 538 million shares traded on the southern bourse, worth VNĐ11.4 trillion (US$488 million).

 

The 30 biggest stocks tracker VN30-Index also tumbled, down 2.07 per cent, to 1,206.00 points.

 

In the VN30 basket, only two stocks climbed, while 24 stocks slid. The other four ended flat.

 

Vingroup (VIC) and Vinhomes (VHM) witnessed the biggest drop in the VN30 basket as they both fell more than 3 per cent.

 

Banking stocks also suffered, such as Techcombank (TCB) decreasing by 5.2 per cent, Sacombank (STB) down by 2 per cent, Military Bank (MBB) and Vietnam International Bank (VIB) both declined by 1.8 per cent, Maritime Bank (MSB) and Vietcombank (VCB) both dropped by 1.5 per cent.

 

Rumour on ban of corporation leader refuted

 

Lieutenant General Tô Ân Xô, Chief of the Office and Spokesperson of the Ministry of Public Security, on Monday stated that information posted on social networks about preventive measures imposed on the head of a large enterprise is incorrect.

 

According to Xô, in recent days, a number of social media accounts have spread information that a head of a large corporation was banned from leaving the country because he was being investigated.

 

The ministry confirmed that such information is false, he said, adding that currently, its professional departments are verifying and clarifying who is behind the rumour for strict handling in accordance with the law.

 

The rumour about the person, who has a certain influence on the stock and corporate bond markets, not only has severe consequences on the economy, causes damage to many organisations and individuals, but also shows signs of a criminal offence.

 

Việt Nam’s stock market has been through some ups and downs following a series of high-profile corporate arrests in the first half of 2022, rattling the market.

 

As of mid June, market capitalisation reached VNĐ6.34 trillion, 18.4 per cent down compared to the 2021 year-end period. However, Việt Nam has been on a roll when it comes to growth and profits, having the second highest liquidity in ASEAN, only after Thailand.

 

It is doing its best to reform the securities market and bring it closer to international standards for unleashing the Emerging Market index inclusion potential. FTSE added Việt Nam to a watch list in September 2018 for possible reclassification to secondary Emerging Market status, due in September 2022.

 

The market is yet to make it onto MSCI’s watch list, but if required reforms are implemented, it might meet the necessary criteria ahead of May 2023, before the next review. VNS