(Bloomberg) -- Asia’s top stock market this year is about to become the world’s worst performer this month.
Vietnam’s Ho Chi Minh Stock Index slid 3.2 percent at the close Thursday as trading resumed after a holiday on Wednesday, with foreign investors unwinding their positions in emerging markets and rushing to exit a market that reached a record about two weeks ago.
Thursday’s fall brought the drop so far in April to 11 percent, on course for its worst monthly performance in seven years. The decline wiped out more than $15 billion from the nation’s market capitalization.
“There is a lot of foreign selling today and clearly the market is on a down trend and it is really pushing some margin calls,” Michel Tosto, Ho Chi Minh City-based head of institutional sales and brokerage at Viet Capital Securities, said by phone.
The benchmark VN Index climbed a 22 percent this year to a record on April 9, extending a 48 percent rally in 2017. The country attracted the second-highest amount of foreign inflows in Southeast Asia this year, attracted by the rally and a privatization program by the government has also led to a flurry of companies tapping the capital markets.
As investors fled the market, the gauge entered a technical correction at the start of the week with a drop of more than 10 percent from the peak, before extending the slide on Thursday.
Techcombank, a Vietnamese lender backed by Warburg Pincus, is seeking to raise about 21 trillion dong ($922 million). This would be Vietnam’s biggest initial equity offering, surpassing mall operator Vincom Retail JSC’s sale in October, data compiled by Bloomberg show. Luxury property developer Vinhomes JSC, which recently started gauging demand for its offering, could raise as much as $2 billion, exceeding Techcombank, Bloomberg News reported.
The fundraising efforts may have added to the market slump, according to Fiachra Mac Cana, managing director at Ho Chi Minh Securities Corp.
“It is exacerbated by rising equity supply in the market due to a number of large deals plus a more cautious stance by foreign investors,” he said.
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