Vietnam Stocks Fall as Rally Drives Valuations to 39-Month HighBloomberg News
Vietnam stocks fell the most in Asia, snapping a three-day advance that drove valuations to the highest level in more than three years.
The Ho Chi Minh City Stock Exchange’s benchmark VN Index fell 0.7 percent to 505.93 at the close, the biggest loss since March 26. The measure climbed 3.8 percent in the three days through April 2, driving the gauge’s valuation to 14.4 times reported profit, the highest level since December 2009, according to data compiled by Bloomberg. Vingroup Joint-Stock Co., the biggest listed property company, dropped 2.3 percent.
“The market was overheating in the last few days,” said Giang Trung Kien, Hanoi-based head of research at FPT Securities Co. “We may see more light corrections in the next sessions.”
Stocks climbed earlier this week after the State Bank of Vietnam cut its policy interest rates by one percentage point on March 25 to spur the economy and boost lending as inflation slowed to 6.64 percent in March. That was the seventh reduction in borrowing costs since the start of 2012.
The VN Index’s 14-day relative strength index, a measure of market momentum, rose to 71 yesterday, above the 70 threshold that some traders view as a sign the market is poised to drop.
Vietnam’s gross domestic product expanded 4.89 percent in the first three months of the year from the same period a year earlier, the General Statistics Office said on March 27, compared with the 5.2 percent median estimate of economists in a Bloomberg survey.
— With assistance by Giang Nguyen