Vietnam’s main bourse VN Index plunged as much as 3.3% intraday before closing down 1.6% on Monday, following the report by Reuters of the reshuffling of high-level officers.
Reuters reported by citing a letter seen by its reporter that Vietnam’s parliament is set to meet on Thursday to discuss unspecified “personnel issues”. This led to a wide speculation of a reshuffle of the Communist-ruled country’s top leadership with a possibility of a resignation of president Vo Van Thuong.
In a special meeting convened in January last year also saw the then president Nguyen Xuan Phuc signed.
BLS Global Investing sees that the decline was a short profit taking with a short-term negative sentiment in the market. This does not impact the Vietnamese market’s fundamentals, while also maintaining a positive outlook on the market due to its cheap valuation of PE 11.7x, -1SD from 5-year historical average.
The analyst noted that Vietnam’s stock market also outperformed Wall Street this year, hence, a correction to build a new base is understandable.
