BLOOMBERG:
"
Vietnam stocks
posted their biggest retreat since 2001, extending a six-week selloff
that turned the benchmark index into the world’s worst performer, amid
escalating tensions with China.
The VN Index
plunged
5.9 percent to close at 527.09, the steepest drop among 93 global
indexes tracked by Bloomberg. Vietnam Dairy Products JSC sank 6.7
percent for a record one-day loss, while Vingroup JSC retreated 3.1
percent. Trading is proceeding normally and officials are monitoring the
market, Le Hai Tra, deputy chief executive officer of the Ho Chi Minh
City Stock Exchange, said by phone.
The benchmark gauge for
Vietnam’s $52 billion equity market has tumbled 13 percent from this
year’s peak on March 24 amid growing tension with
China
over disputed waters and speculation that leveraged traders are
liquidating positions. The VN index has wiped out most of the 20 percent
advance through its March high that had made the gauge this year’s top
performer in Asia.
“The talk is all about the political
tension,” Michel Tosto, the head of institutional sales at Viet Capital
Securities in Ho Chi Minh City, said by phone. Some investors are
showing signs of “panic” while others are “bottom-fishing” for
beaten-down stocks, he said
Vietnam said this week it’s prepared to take measures over China’s
placement of an exploration rig in disputed waters, as the U.S. called
the Chinese move “provocative” given recent regional tensions.
Valuations Drop
The
Southeast Asian country’s government said yesterday that Chinese boats
intentionally rammed Vietnamese vessels in waters near the Paracel
Islands. Armed Philippine police also arrested Chinese fishermen near a
disputed shoal close to the Spratly Islands. China responded by accusing
both countries of violating its sovereignty over the island chains.
“This
row between China and Vietnam has put cold water on the market,” Marc
Djandji, a partner at Asean Strategy Group, said by phone. “This is a
serious thing. It’s not something that is resolved in a day. People are
hoping for some sort of way to resolve this internationally.”
Vietnam
and China fought a border war in 1979 that resulted in a rupture that
lasted until relations were fully normalized in 1991. Vietnamese history
over the last two millennia has been characterized by Chinese
incursions into what is now Vietnam’s territory, and the names of
streets in cities are regularly named after heroes from those conflicts,
such as Ngo Quyen, Nguyen Trai and Le Loi.
Bargain Hunters
Even
with the recent slide, the VN Index has advanced 4.5 percent this year
as the central bank cut the benchmark refinancing rate to a six-year low
and inflation slowed to less than 5 percent for the first time in more
than four years.
Today’s stock plunge is “overblown” because
“valuations are not bubble levels and monetary indicators are
stabilizing,” said Alan Richardson, whose Samsung Asean Equity Fund
outperformed 96 percent of peers tracked by Bloomberg during the past
five years. His fund is “comfortably buying” Vietnamese stocks now,
Richardson said.
The VN Index’s price-to-earnings
ratio
fell to 12.7 today, the lowest level since January, data compiled by
Bloomberg show. By comparison, the ratio for Southeast Asia’s benchmark
indexes range from 16 in
Thailand to 20 in the
Philippines and 23 in
Indonesia.
The
nation’s biggest money manager said two days ago it’s been buying amid
the selloff. Equities are “extremely attractive” because valuations are
low relative to other markets in Southeast Asia, Andy Ho, chief
investment officer at VinaCapital Group, which oversees about $1.6
billion, said in a telephone interview.
“The sea tensions are
worrying investors a lot, and prompted many of them to sell,” Hoang
Thach Lan, the Ho Chi Minh City-based brokerage unit head at MHB
Securities Co., said by phone today. “However, there are also some
investors who viewed the tensions as a temporary situation and they took
this chance to buy. We see trading volume is very large.” "
GOD BLESS VIETNAM !
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