On September 17, shares of Novaland (NVL), chaired by the executive, continued their steep decline, losing up to VND550 to settle at VND10,650 per share at one point before closing the morning session at VND10,850.

This price is significantly lower than the over VND18,000 per share seen in early April and the nearly VND90,000 per share (adjusted price) in September 2022. Currently, the stock is only slightly above the record low of VND10,300 per share reached in late February 2023.

NVL's sharp decline in recent months is attributable to multiple negative market developments surrounding its stock.

On the morning of September 17, the Ho Chi Minh City Stock Exchange (HoSE) announced that NVL would be placed under special surveillance starting September 23 due to violations related to the late submission of its 2024 semi-annual financial report.

Earlier, on September 11, NVL hit its lower price limit after being added to HoSE's list of stocks ineligible for margin trading. This was triggered by Novaland’s delay of more than five working days in releasing its reviewed financial report for the first half of 2024.

Additionally, the news of a reduction in the ownership stake held by entities related to the company's chairman has likely added to the downward pressure on NVL shares. On September 6, NovaGroup sold over 3 million shares, reducing the related group's ownership to below 39%. Since the beginning of the year, NovaGroup has sold more than 36 million NVL shares. Over the past two years, entities related to the chairman have reduced their ownership of NVL shares by more than 400 million.

Despite these challenges, Novaland’s financial situation has improved due to its restructuring efforts. Several projects are showing positive signs of progress. For example, the Aqua City mega-project recently secured a VND1.1 trillion bank loan, and several properties within this development are now eligible for sale.

In response to HoSE's actions, Novaland announced that it is working closely with auditors to expedite the release of the semi-annual 2024 financial report.

The first half of 2024 marked an aggressive restructuring phase for Novaland, during which the company resolved a significant portion of its outstanding debt and saw improvements in financial stability, legal project statuses, construction progress, and housing certifications for residents.

According to Novaland, the increasing volume and complexity of transactions, along with a higher number of documents requiring review, has delayed the finalization of its financial report. However, the company is collaborating with auditors to ensure transparency and accuracy in the report.

Nearly two years into its restructuring, Novaland has accelerated the construction of key projects, delivered products to customers, and worked with local authorities to resolve legal obstacles. The company has also negotiated with banks and financial institutions to secure additional funding to continue its project developments.

On the stock market, caution remains prevalent, with low liquidity levels. However, some stocks, particularly in the "Vin family" group, showed gains. By the end of the morning session on September 17, shares of Vinhomes (VHM) rose VND900 to VND42,650, Vingroup (VIC) gained VND250 to VND42,300, and Vincom Retail (VRE) increased by VND200 to VND19,100 per share.

The banking sector showed mixed performance, while consumer and retail stocks were more positive.

The VN-Index edged up 1.08 points to 1,240.34.

In the afternoon session, money inflows increased sharply, driving the VN-Index up by nearly 12 points to over 1,251 points by 2:18 PM.

However, liquidity remained low as investors exercised caution ahead of the U.S. Federal Reserve's interest rate decision. There is a 60% likelihood that the Fed will reduce rates by 50 basis points in its September 17-18 meeting. The U.S. Dow Jones Industrial Average hit a new all-time high on September 16, while Asian stock markets remained more cautious. Gold prices also hit a new record.

Some forecasts suggest that global investors are considering funneling capital into Southeast Asian markets due to the potential for interest rate cuts.

Domestically, the State Bank of Vietnam has reduced its refinancing interest rate to 4%. The exchange rate is also trending lower. However, foreign investors have been net sellers throughout the year, and market liquidity remains weak.

Manh Ha