Vietnam's stocks dropped on Wednesday, dragging the benchmark index down the most in Asia, on concern investment in the nation's equities may decline as economic growth slows.
The benchmark VN Index on the Ho Chi Minh City Stock Exchange declined 1.5 percent to 413.09 at the 2:15 p.m. local-time close, the lowest since Feb. 21. The gauge slid 4.2 percent in the second quarter, the biggest decline since the three months ended Dec. 30. Joint-Stock Commercial Bank for Foreign Trade of Vietnam, the country's largest-listed lender by market value, fell 4.1 percent to VND28,100, the lowest close since March 16.
The economy expanded 4.38 percent in the first half of the year, compared with 5.63 percent a year earlier, the Statistics Office said on June 29. Growth this year may be 5.4 percent to 5.7 percent, according to Do Thuc, general director at the office. That compares with a government forecast of 6 percent.
"Investors are very cautious, as prospects for the economy still look gloomy, which may reduce cash flows into the market," Giang Trung Kien, Hanoi-based head of research at FPT Securities Joint-Stock Co., a brokerage unit of Vietnam's biggest publicly traded telecommunications and software company, said Wednesday. "Even though inflation is no longer a concern, there are no positive surprises expected anymore."
Vietnam has entered a period of sluggish growth, the World Bank said in a report last month, citing the slow pace of structural reforms and inefficiencies in state-owned companies, banks and public investments.
Consumer prices rose 6.9 percent from a year earlier in June, the slowest since December 2009.
Bao Viet Holdings, the country's largest listed insurer, dropped 3.2 percent to VND41,900, the lowest close since Jan. 11.