Vietnam's stock market events in 2016

The stock market was affected by the news about sharp oil price falls and Brexit, but the influence did not last a long time.



The world’s oil price fell to a deep low and the VN Index bottomed out at 513.82 points. Oil & gas shares saw prices plummeting in the context of VN Index fall in the first months of 2016.

At that time, GAS of the Vietnam Gas Corporation traded at the lowest price level of VND27,300 per share. But later, the shares regained an impetus and bounced back again, reaching the highest peak of VND73,700 per share on September 29.

Not only GAS, the other shares belonging to the ‘oil & gas’ family such as PVD, PVS, PVC and CNG also saw the same price performance.

The fact that the UK decided to leave the EU in June, shook the global financial market, and the Vietnamese market as well.

On June 24, the VN Index dropped 34 points (- 5.47 percent) with big volumes of shares put on sale and 271 million shares traded, the highest figure in the whole year 2016.

Brexit and the securities index fall reminded investors of Warren Buffett’s saying: “be greedy when others are fearful’. After the fall, the market increased again, which helped the ‘greedy’ investors, who bought shares on the ‘Brexit trading session’ making fat profit.

The TTF, DRH, ATA phenomena

The price of Truong Thanh Furniture Corporation (TTF) tumbled from the peak of VND43,700 per share on July 19 to VND3,810 per share on November 21, which was a nightmare for TTF’s shareholders.

The problem was that nearly VND1 trillion worth of inventory was found ‘evaporated’, which caused the cost price soar to VND1.167 trillion in the second quarter and led to abloss of VND1.1 trillion.

DRH, the shares of a real estate developer, soared from VND7,600 per share in early 2016 to VND82,000 per share, causing a so called ‘DRH fever’.

Later, just within two months, DRH price fell from the peak to VND15,500 per share, causing shock to shareholders. The price fall was attributed to the fact that investors feared troubles with TTF would affect DRH.

ATA also caused a shock to investors when its price plunged from VND7,500 per share to VND650 after the audited finance report showed the loss of VND426 billion. Before that, the company reported the profit of VND30 billion.

VN Index reached its peak of 692.17 points on September 29, the sharpest increase since 2008. Its P/E was 14.3, while the figures were 16.5 for Thailand, 22 for Indonesia and 15.8 for Malaysia.

Kim Chi / vietnamnet