Vietnam's Biggest Stock Bourse Sees Halt Move to Second Day

(Bloomberg) -- Vietnam’s main stock exchange, home to the nation’s benchmark VN Index, will remain shut for a second day on Wednesday following a malfunction, its longest halt in nearly 10 years.

The Ho Chi Minh City Stock Exchange said that while the technical issue that occurred on Monday has been solved, it needs to run tests with securities firms to ensure the “safety and accuracy” of the trading system. The closure means stocks including those of Vietnam Dairy Products JSC, PetroVietnam Gas JSC and VietJet Aviation JSC are unavailable to investors. The bourse averaged $319 million worth of trading each day over the past month, according to data compiled by Bloomberg.

The exchange operator didn’t provide a timing for when trading will restart, according to the statement on its website. The market was expected to resume trading today. It’s the longest halt since a three-day shutdown in May 2008 because of a computer glitch, and one that could have an impact on the market, especially in the eyes of overseas investors, said Tyler Cheung, head of institutional client division at ACB Securities JSC in Ho Chi Minh City, who added that his observations did not reflect the opinion of his firm.

“Being shut for multiple days will start to have an affect on market sentiment, especially from the offshore foreign investors who have recently joined, or are planning on joining the market,” he said. “What we are hoping to hear is clarity from the exchange on what the causes are, when we can expect trading to resume and that the issues have been resolved.”

Markets in Asia have seen several trading halts recently. Indonesia’s stock exchange suffered two disruptions within 10 days in July. That same month, India’s biggest bourse suffered a three-hour halt, its longest ever. Singapore Exchange Ltd. was rebuked by its regulator after trading was shut early in July 2016 because of a technical malfunction, and after it failed to follow through on two pledges to reopen.

Gains Elsewhere

Vietnam opened its stock market in July 2000 with just two listed companies and now has a total value of $170 billion. The Southeast Asian nation was one of the world’s fastest-growing economies last year at 6.8 percent and started stock-index futures trading in August. 

The Hanoi Stock Exchange HNX Index closed down a fraction, having risen as much as 1.3 percent earlier Wednesday. The Unlisted Public Company Market rose 1.4 percent to its highest level since April 2016. The VN Index was one of the 10 best-performing national gauges in the world in 2017, according to data compiled by Bloomberg, and has gained 10 percent in this year to stay among the top indexes.

“There’s more things happening in Vietnam than the exchange shutting for two days,” said Ruchir Desai, a Hong Kong-based senior investment analyst at Asia Frontier Capital Ltd, which holds Vietnamese stocks. “Most institutional investors in Vietnam have a long-term view on the country and the macro outlook is positive.”

The Ho Chi Minh exchange has been working with Thailand’s stock exchange to investigate the matter, State Securities Commission Chairman Tran Van Dung said in an emailed statement on Tuesday. The Stock Exchange of Thailand declined to comment. The Vietnam bourse experienced a malfunction in August that briefly affected data distribution.

“Glitches happen from time to time but multi-day shutdowns are rare these days, given most exchanges have robust recovery plans and systems,” said Michael Wu, a Hong Kong-based senior equity analyst at Morningstar Inc.

To contact the reporters on this story: Nguyen Kieu Giang in Hanoi at giang1@bloomberg.net, Andrea Tan in Singapore at atan17@bloomberg.net.

To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, John Boudreau at jboudreau3@bloomberg.net, Peter Vercoe

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