Vietnamese stocks dropped the most in Asia on concerns foreign investors are slowing purchases of the nation’s shares amid speculation the government is making limited progress in its economic restructuring plan.
The VN Index slid 3.9 percent, the biggest drop since Aug. 23, to 465.05 at the close in Ho Chi Minh City. Tan Tao Investment Industry Joint-Stock Co., the most-active stock by volume today, slumped 6 percent. Kinh Bac City Development Share Holding Corp. plunged 6.9 percent. The index’s 30-day volatility climbed to the highest since Oct. 1.
Overseas investors bought a net $3.86 million of Vietnamese shares this month through yesterday, compared with $123.4 million in January, according to data compiled by Bloomberg.
“The gain in the market was largely due to foreign investment inflow, and the flow is reversing now,” Le Chi Phuc, investment director at SGI Capital, a unit of Saigon Invest Group, said by phone today. “The stock market also got over-optimistic that the economic outlook will improve with the restructuring process, but investors haven’t seen much improvement yet.”
Vietnam’s Prime Minister Nguyen Tan Dung approved a master plan to restructure the economy, overhaul banks and speed up share sales of state-owned companies, the government said on Feb. 21. The plan, to be implemented through 2020, aims to enhance the country’s competitiveness and growth.
— With assistance by Diep Pham