Vietnam Equities Slide Below 1,800 Amid Oil Price Spike
The VN-Index broke below the 1,800 threshold as crude oil prices surged and foreign investors increased net selling. Vingroup affiliates led the decline, with VIC dropping to VND 243,300.
Vietnamese equities faced broad-based selling pressure, pushing the VN-Index below the 1,800 level. The decline was driven by a spike in global oil prices and intensified foreign net selling. According to GN stocks/shares-surge, the market breadth was weak, with 525 stocks declining compared to a significantly smaller number of gainers. Liquidity on the Ho Chi Minh Stock Exchange remained subdued, with total trading value staying under VND 17 trillion.
Large-cap stocks bore the brunt of the sell-off. Within the VN30 index, 28 of the 30 constituents fell. Vingroup-linked shares were particularly vulnerable, with VIC dropping VND 4,400 to VND 243,300, a significant retreat from its recent peak. Other heavyweights such as GVR, MSN, and SSI also posted double-digit percentage losses or sharp absolute declines, reflecting high valuation concerns among institutional investors.
Foreign Capital Withdrawal Accelerates
International investors shifted to aggressive net selling, removing approximately VND 845 billion from the market. They bought about VND 1.966 trillion in shares while selling nearly VND 2.812 trillion. The selling was concentrated in banking and real estate names, including STB, MBB, VPB, VHM, and VNM. Conversely, foreign buying interest was limited to a few stocks like BSR, VIC, and PNJ, but this was insufficient to counterbalance the broader outflows.
The capital withdrawal occurs against a backdrop of rising global interest rates. The yield on 10-year US Treasuries has approached 5%, increasing the cost of capital for emerging market assets. This macroeconomic pressure has reduced the appeal of Vietnamese equities for foreign portfolios, particularly as the risk-free rate rises globally.
Oil Surge Complicates Policy Outlook
Crude oil prices remain elevated, with WTI hovering around $99 per barrel and Brent near $104. Although prices dipped slightly on the evening of September 11, the sustained high levels pose a direct threat to Vietnam's cost structure. Rising transportation and production inputs are feeding into inflation risks, which complicates the monetary policy environment. This dynamic pressures the State Bank of Vietnam to maintain higher interest rates for longer.
Domestic banking rates have already responded, with some institutions offering deposit rates of up to 8.2% per annum. If these rates remain high, they compete directly with equities for idle capital. Businesses face higher funding costs, which can compress profit margins. This environment makes it harder for the stock market to sustain its recent rally, as the cost of leverage increases for both corporate borrowers and retail investors.
Market Upgrade Timing Raises Stakes
The recent volatility arrives just days before FTSE Russell upgrades Vietnam to secondary emerging market status on September 21. While this milestone is expected to attract passive foreign capital, the timing is precarious. Many of the anticipated inflows may have already been priced into the index's run-up toward the 1,900 level. The current correction suggests that investors are recalibrating their expectations in light of global macroeconomic headwinds.
Despite the market decline, the personal wealth of Vingroup chairman Pham Nhat Vuong remained high on global rankings. However, the drop in stock prices has eroded a portion of his net worth, illustrating the direct link between corporate share performance and individual billionaire status. The disconnect between the index's recent highs and current levels highlights the fragility of the recent rally.
