The stock market last week (September 11-15) was under strong selling pressure because of bad news about several real estate firms.

Real estate share prices started to drop after Novaland announced a delay in paying the principal and interest of the NVLH2123011 lot of bonds because it could not arrange enough money for repayment.

To date, Novaland can only pay a part of the interest and VND10.6 billion of principal out of the total 1 trillion it has to pay. 

On August 29, the company had to pay a part of principal of the lot of bonds.

According to the Hanoi Stock Exchange (HNX), Novaland had to pay the principal of nine due bond lots with total value of VND5.2 trillion; the realtor has just paid VND200 billion.

Novaland shares (NVL) saw prices drop sharply on September 13-14, by 5-6 percent per session.

Investors last week also witnessed a rare event with Hai Phat Invest (HPX), when 27 percent of capital was transferred within one trading session (September 14). This happened when shares were about to be suspended because of the company’s delay in information exposure. Prior to that, 50 percent of shares changed hands within one morning late last year.

Most real estate share prices dropped sharply last week, including Vingroup (VIC) which fell by 9.3 percent to VND53,600 per share; Vinhomes (VNM) by 6.5 percent to VND50,500, and Vincom Retail (VRE) to VND28,400.

By contrast, oil and gas and securities companies’ shares escalated in price on the investor’s expectation on oil price increases. Investors also hoped the South Korean KRX transaction system would help improve liquidity in the stock market.

By the end of the last week, the VN-Index had decreased by 14.1 points, or 1.1 percent, over the week before to 1,227.36 points, while the HNX-Index fell by 1.3 percent to 252.76 points and UpCom-Index 1 percent to 93.8 points.

One of the factors that affected investors’ decisions last week was the exchange rate fluctuation. The dollar price surpassed the VND24,000 per dollar threshold, while foreign investors’ net sales of VND2.154 trillion caused investors to be cautious.

However, the information about the deposit interest rate decreases and investors’ high expectations on KRX supported the market. Individual investors kept buying shares in bulk, thus helping increase liquidity. 

The average trading value of the three bourses reached VND30.306 trillion, up 9.5 percent over the week before.

What will happen?

The investors’ biggest concern is the US FED’s meeting this week. Investors hope the FED will temporarily stop interest rate increases. The probability of the FED keeping the interest rate unchanged is 93 percent at the September meeting. Meanwhile, the probability rate of the FED continuing to raise the interest rate at the November meeting is 50 percent.

Investors have felt increased exchange rate pressure in recent weeks. The continued sales by foreign investors have cooled the market’s excitement.

The pressure has been increasing since August when the US dollar in the world market began increasing after stability in the first half of the year. However, analysts believe this is not worrying.

MB Securities believes that pressure on the dong will not be high in the last months of 2023 thanks to the high trade surplus in recent years. 

According to Dinh Quang Hinh from VNDirect, the State Bank of Vietnam (SBV) has every reason to stabilize the exchange rate this year, including the high trade surplus, stable FDI, and overseas remittances. The dollar supply will be more abundant when selling shares to foreign investors.

The exchange rate stability will help minimize the negative impact on Vietnam’s economy and improve the competitiveness of export products. The moderate depreciation of the dong against the dollar (< 3 percent) will help boost exports.

VNDirect does not think foreign capital will flow out of Vietnam.

Hinh also believes that no surprise will occur at the FED’s upcoming meeting and there will be no big upheavals in the world’s financial market.

Manh Ha