Brian Jeffrey
On September 17, shares of Novaland (NVL) experienced a significant drop, falling by up to VND550 and reaching VND10,650 at one point, ultimately closing the morning session at VND10,850. This marks a considerable decline from over VND18,000 per share in early April and nearly VND90,000 (adjusted) in September 2022, putting it close to the lowest price of VND10,300 recorded in February 2023.
The recent decline of NVL stock can be attributed to various adverse market conditions affecting its performance.
On the morning of September 17, the Ho Chi Minh City Stock Exchange (HoSE) announced that NVL would be under special surveillance starting September 23 due to failures in timely submitting its 2024 semi-annual financial report.
Furthermore, on September 11, NVL’s stock hit its lower limit after being marked ineligible for margin trading due to a delay of over five working days in presenting its reviewed financial report for the first half of 2024.
Adding to the challenges, news emerged about a reduction in the ownership stake held by associates of the chairman. On September 6, NovaGroup sold over 3 million shares, dropping their combined ownership to below 39%. Since the start of the year, NovaGroup has disposed of over 36 million NVL shares, amounting to over 400 million shares reduced in the past two years.
Despite these setbacks, Novaland has been making strides in its financial health through restructuring. Several projects are progressing well, one notable example being the Aqua City mega-project, which recently obtained a VND1.1 trillion loan and has properties ready for sale.
In light of the HoSE developments, Novaland is actively collaborating with auditors to expedite the release of its semi-annual financial report for 2024.
The first half of 2024 has been a crucial period for Novaland’s restructuring strategy, helping the company manage a significant amount of outstanding debt and improve its financial situation along with project legal status, construction progress, and housing certifications.
Novaland has indicated that the challenges in finalizing the financial report are due to an increase in transaction volume and documentation needing review, but they are focused on ensuring transparency and accuracy.
As Novaland’s restructuring continues, the firm has intensified construction on key projects, delivered products to customers, and engaged with local authorities for legal hurdles. Efforts to secure additional financing from banks have also been ongoing to support business development.
The stock market remains cautious with low trading volumes, although some stocks, particularly from the “Vin family,” saw gains. By the close of the morning session on September 17, shares of Vinhomes (VHM) rose by VND900 to VND42,650, Vingroup (VIC) increased by VND250 to VND42,300, and Vincom Retail (VRE) gained VND200 to VND19,100.
The banking sector exhibited mixed results, while the consumer and retail sectors performed more positively.
The VN-Index managed a rise of 1.08 points, reaching 1,240.34.
During the afternoon trading session, there was a notable increase in capital inflow, pushing the VN-Index up by nearly 12 points, exceeding 1,251 points around 2:18 PM.
However, investor caution persisted, keeping liquidity levels low ahead of the U.S. Federal Reserve’s interest rate announcement. Expectations suggest a 60% chance of a 50 basis point rate cut in the September 17-18 meeting. The U.S. Dow Jones Industrial Average achieved a historic high on September 16, while Asian markets maintained a cautious posture. Gold prices witnessed a new peak as well.
Some analysts predict that global investors are considering investing in Southeast Asian markets for potential interest rate reductions.
On the domestic front, the State Bank of Vietnam has lowered the refinancing interest rate to 4%. The exchange rate is also decreasing. Nevertheless, foreign investors have been net sellers throughout the year, contributing to weak market liquidity.
