(Corrects tourism data in fourth paragraph.)
March 15 (Bloomberg) -- Vietnam’s benchmark stock index fell for a second day, as construction companies dropped after the government said transportation project funding will be slashed and tourism operators sank on concern an earthquake and tsunami in Japan will reduce visitors.
The Ho Chi Minh City Stock Exchange’s VN Index slid 2.3 percent to 468.74 at 11 a.m. local time close, the lowest since March 7.
Descon Construction Corp., a construction and real estate development company, lost 4.8 percent to 19,700 dong. The Ministry of Transportation will cut disbursement for construction projects to 11 trillion dong ($527 million) this year from an earlier plan of as much as 25 trillion dong, Transportation Minister Ho Nghia Dung said in a statement filed on the government’s website yesterday.
Vinpearl Joint-Stock Co., the owner of a resort, tumbled the maximum 5 percent to 67,000 dong, after Thoi Bao Kinh Te Vietnam newspaper said the number of tourists from Japan may slump by about 30 percent this year, citing tourism companies. Vietnam had forecast 5.5 million overseas visitors this year, the report said, without specifying a figure for Japan.
Investors are concerned that investment “into Vietnam will shrink as Japanese investors take their funds to rebuild their home country,” Michel Tosto, director for institutional sales and brokerage at Ho Chi Minh City-based Viet Capital Securities, wrote in an e-mail today. “Less foreign direct investment from Japan means less factory construction in Vietnam and a lot less travelers from Japan.”
Construction Joint-Stock No. 5, which also distributes building materials, slumped 4.9 percent to 29,400 dong, the lowest level since May 11, 2009. Royal International Corp., which provides villa and room rentals, fell 4.2 percent to 13,600 dong, the most since Feb. 21.
“Japan is among the top 10 countries that travel to Vietnam and the earthquake will definitely affect the number of tourists since they will have to prioritize spending to rebuild their lives,” Nguyen Manh Cuong, deputy head of Vietnam National Administration of Tourism, said by phone today.
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