VN-Index dropped by 18 percent from the record on April 9 to 985.92 points on May 24.
Dung attributed the nosedive in May partly to a fall in the global stock market due to the world economic and political situation. Though trade tension between the US and China eased, investors still feared a trade war between these two biggest economies of the world. Another negative impact is the possibility of the US Federal Reserve and the European Central Bank’s hiking of interest rates.
Foreign investors began to withdraw money from emerging markets, including those in Southeast Asia. Stock markets around the world, from the US, Europe to Asia, have posted declines since January 2018, mostly down between 7 and 10 percent.
Meanwhile, the Vietnamese stock market grew strongly for a long period of time and has entered a fluctuation period, he said, elaborating that the VN-Index surged 48 percent in 2017 and continued to rise by 17 percent in Q1, so investors tended to sell shares to gain profits and wait for suitable opportunities to continue investing.
That trend coincided with the decrease of the global market, thus leading to a bigger impact on the domestic market, he noted.
“Although the VN-Index dropped, market cap still soared dramatically because in the first half of 2018, many big businesses were listed in the market, especially Vinhomes JSC,” Dung said.
He added total market cap reached 3.846 quadrillion VND (more than 168 billion USD), up 9.4 percent from the end of 2017 and equivalent to 76.8 percent of the country’s GDP.
As of May 23, foreign investors sold 4.229 trillion VND worth of shares on both HCM Stock Exchange and the Hanoi Stock Exchange. However, they still poured 615 million USD and 450 million USD into the market in April and the first half of May, respectively.
This shows foreign investors still have high hopes for the market and are ready to disburse money when appropriate, Dung said.
He added with good macro-economic growth, stable financial-monetary and foreign reserve markets, decreasing lending interest rates, positive performance of listed companies and no signs of foreign investors’ withdrawal, the stock market of Vietnam can still expand in the future.