A series of high-profile corporate arrests has triggered a $40bn wipeout for Vietnamese stocks and rattled investors’ confidence at a delicate moment for the fast-growing economy.
After the benchmark index more than doubled in value from a trough in March 2020, the crackdown set off the market’s steepest one-day plunge since early days of the pandemic this week. It hit a nine-month low on Tuesday.Investors say that the crackdown has shaken at least short-term confidence in Vietnam’s outlook and risks scaring away capital just as pressure is also coming from fast-rising US rates and global nervousness about the Ukraine war and other geopolitical tensions.
Markets stabilised on Wednesday on hopes that the fallout had been contained, but they have yet to bounce back convincingly. One test looms with the initial public offering of vehicle maker VinFast, planned for later in 2022. Nevertheless, the arrests have caught some off guard by striking at the heart of the country’s capital markets and a property sector that accounts for about a quarter of the index.
Besides Quyet, who is chair of property and leisure company FLC Group, police have arrested Do Anh Dung, chair of property firm Tan Hoang Minh Group, and Do Duc Nam, CEO of brokerage Tri Viet Securities .
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