Vietnam’s stocks slid the most in three months to enter a so-called correction after the central bank widened the currency trading band last week and concern grew that lenders would report lower profits.
The VN Index dropped 2.7 percent to 573.15 at the 3 p.m. close, taking losses since its July 14 peak to more than 10 percent. The State Bank of Vietnam doubled the amount the exchange rate can move either side of a daily fixing to 2 percent on Wednesday after China, the nation’s biggest trading partner, devalued its currency.
The currency slumped 1.3 percent last week as Prime Minister Nguyen Tan Dung sought to safeguard export growth, which slowed to 9.5 percent in the first seven months from 14 percent a year earlier. The move follows two devaluations of the dong, by 1 percent each, in January and May.
“There is no good news coming to the markets, just bad news,” said Attila Vajda, managing director at Project Asia Research, a Singapore-based advisory firm. “Investors are also concerned about the profitability of some banks.”
Vietnam Joint Stock Commercial Bank for Industry & Trade tumbled the most in almost two years. PetroVietnam Gas JSC fell 6.1 percent to its lowest level since March 2013.
The nation’s stock gauge trades at 12-month projected earnings of 11.9 times, compared with its five-year average of 11.