Vietnam’s stock market loses all of its 2018 gains

Vietnam’s stock market fell by 2.23 percent on Friday to close at more than 963 points, meaning it has lost every gain it has made so far this year.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HOSE) hit 984.24 on the last trading day of 2017, the highest ever since 2007, before reaching 1,000 points in early January.

Investors are beginning to question if Vietnam’s stock market can replicate the 48 percent growth registered last year after it lost 12 percent in April, which was also its worst monthly performance so far this year, according to a Wednesday report by South China Morning Post.

Bloomberg said in a Thursday report that American research firm MSCI may have good reason when keeping Vietnam in frontier market territory.

The newspaper said that large moves by a few companies can swing the broader market big-time and currently five big companies are contributing to more than 40 percent of HOSE, namely real estate conglomerate Vingroup and its residential property development unit Vinhomes, dairy giant Vinamilk, the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and PetroVietnam Gas Corporation, or PVGas.

Vietnam’s stock market has remained unpredictable in the past months.

It closed at 1,120 points on February 28, up a staggering 14 percent from the beginning of the year, which was the biggest gain worldwide.

On the closing session of March, VN-Index rose 19.33 percent against the start of the year to 1,174 points and maintained its leading position among the fastest growing markets in the world.

Then it repeatedly plunged in April and closed at more than 985 points on May 22, marking the very first time it had dropped below 1,000 since the beginning of this year.

Now it looks like the stock market has quite a long way to go to match predictions made for it earlier this year.

RongViet Securities Corporation in Ho Chi Minh City said in a report in February that the VN-Index will increase by at least 17 percent this year, and even 67 percent in its best scenario, meaning it could end the year somewhere between 1,170 and 1,640.

Nguyen The Minh, a senior analyst at Saigon Securities Incorporation, said “the VN-Index could reach 1,050 points in the short term and 1,300 by the year-end.”

In its latest report, Bao Viet Securities said the VN-Index could even reach 1,182-1,187 in the coming sessions.