Vietnam's stock market loses $1.12 bln as Brexit wreaks havoc worldwide

Thanh Nien News

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Ho Chi Minh City Stock Exchange. Photo: Diep Duc Minh Ho Chi Minh City Stock Exchange. Photo: Diep Duc Minh

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Vietnam’s two bourses lost a total of more than VND25 trillion (US$1.12 billion) on Friday as Britain voted to leave the European Union in a historic decision that has shocked the financial world.
The Vn-Index closed at 620.77 points, down 1.82 percent, according to figures released by the Ho Chi Minh City Stock Exchange.
The bourse’s market capitalization was estimated at VND1,247 trillion, a decrease of over VND22.6 trillion from the day before.
Meanwhile, the Hanoi Stock Exchange recorded a loss of over VND2.8 trillion in stock value, putting its market capitalization at VND155.88 trillion.
Vietnam’s authorized gold producer SJC increased prices by 2.4 percent to VND35.1 million per tael.
The dollar/dong exchange rate listed at many banks also saw slight increases, with Vietcombank selling the US dollar at VND22,365 on Friday, compared to VND22,340 the day before.
Phan Dung Khanh, head of investment advisory at Maybank Kim Eng Securities, told news website Saigon Times Online that unlike forecasts, the country’s financial markets have been affected by Brexit.
Brexit’s negative impacts on Vietnam’s stock market will likely last for a long time, since it will take some time for the EU and Britain to complete the exit procedures, Khanh said. The so-called "divorce" process may last up to two years.
He also warned that with some other countries such as Denmark and Sweden discussing about following Britain’s move, the global economy will possibly continue to face huge risks.
An unnamed expert with the Delegation of the European Union to Vietnam refused to comment on whether Brexit will affect the free trade agreement between Vietnam and the EU, according to the website. The pact is set to take effect in 2018.
A senior official from the Ministry of Industry and Trade agreed that it is too soon to say anything about Brexit’s direct impacts on Vietnam’s trade with the EU and the UK, it said.
However, he said, the ministry has ordered its agencies to watch the situation closely.
Vietnam is the second biggest trader with the EU in the Southeast Asian bloc ASEAN, accounting for 19.1 percent of the 201.4 billion euros ($227 billion) in total trade between the two communities last year, according to data from the EU delegation in Singapore. That was an increase of 15.8 percent in 2014.

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