The VN-Index hit a nearly two-year low. In the first week of October, the chairwoman of unlisted real estate developer Van Thinh Phat (VTPhat) was arrested on allegations of illegal corporate bond issuance and trading. This news trigged higher-than-usual withdrawals by depositors at Saigon Commercial Bank (SCB), which is believed to have a close relationship with VTPhat, as reported by Bloomberg on October 11. These events caused the VN-Index (VNI) to plunge to near 1,000 on October 6. After a technical rebound in the middle of the month, the VNI sank to a 23-month low of 986 on October 24 due to concerns over VND depreciation and a further interest rate hike by the State Bank of Vietnam (SBV). The VNI recovered to 1,028 at the end of October but declined 9.2% MoM. The VNI has plunged 31.4% thus far in 2022, underperforming neighboring markets such as Indonesia’s JCI (+7.9%), Thailand’s SET (-2.9%) and the Philippines’ PCOMP (-13.9%).

All sectors tumbled — with diversified financials suffering the most. Diversified financials experienced the steepest decline (-24.5%), led by VND (-34.3%), SSI (-17.7%) and HCM (-16.3%). The materials sector (-20.7%) posted the second largest decline, attributed largely to HPG (-26.2%) and GVR (-31.1%). Next was industrials (-14.2%), which was driven by DIG (-40.4%), GEX (-28.7%), HVN (-19.1%) and VGC (-21.0%).

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