Vietnamese stock market world’s second worst performer: StockQ

Vietnam’s benchmark VN-Index dropped 4.28% in the past trading week, ranking second worst in the world, only behind Argentina's index MERVAL (-18.14%), according to market data provider StockQ.

Data from StockQ showed that in the latest week and month, the VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), ranked second and fourth respectively among the worst performing indexes in the world.

With the "sell-off" session on Thursday, Vietnam’s major index experienced its deepest decline since August.

In the past month, the VN-Index has decreased by 8.08%, ranking fourth worst globally behind the stock indexes of Israel (-12.96%), the United Arab Emirates (UAE) (-8.85%), and the Nasdaq Biotechnology Index (-8.53%).

Explaining Thursday’s VN-Index plunge, leading fund manager Dragon Capital said that the strong selling pressure came from information that Vietnam’s largest private conglomerate Vingoup had completed its sale of international bonds worth $250 million which investors could exchange for Vinhomes shares owned by Vingroup. This sent all three tickers of the Vingroup ecosystem – VIC of Vingroup, VHM of Vinhomes and VRE of Vincom Retail – plunging to their floor prices.

Another piece of information leading to the massive selloffs was a bond default event: Country Garden, the biggest real estate developer in China, had announced its failure to pay interest on a batch of international bonds after the grace period ended on October 17.

This information triggered fears in the market, leading to massive sell-offs, Dragon Capital said.

However, the fund noted that data collected since 2012 showed every time the VN-Index dropped more than 12% in a short period of time, it saw a good recovery when investors calmed down.

As a silver lining in the October 26 session, trading value on the HoSE skyrocketed to over VND23.2 trillion ($942.9 million), twice the previous session’s figure and the highest in the past month. It signaled that the demand for stock accumulation increased sharply when the market dropped to an attractive level.

Portfolio manager Petri Deryng of Pyn Elite Fund, a Finnish investment fund, also expressed his positive perspective on the Vietnamese stock market.

He said the P/S (price to sales) ratio clearly indicates that the stock market is relatively undervalued compared to the levels seen at the beginning of 2022. There is obvious potential for the market to rerate its valuation ratios in the next 12 months.

“We anticipate the valuation of the Vietnamese stock market to rise from a P/S ratio of 1.3 to over 2.0 as disruptions to the financial system are fading away, businesses' outlook improves with more favorable economic conditions, and earnings growth accelerates,” he noted.

In a previous statement, Pyn Elite Fund expected the VN-Index to reach the 2,500-point mark in 2025-2026.

The VN-Index rose 5.17 points, or 0.49%, to 1060.62 on Friday after hitting a five-month low in the previous session. Trading value on the HoSE decreased by 41% to VND13.70 trillion ($557.59 million).