Sellers outnumbered buyers today, causing shares of Phu Nhuan Jewelry Joint Stock Company (PNJ) to trade below their reference price for most of the day. The stock repeatedly touched its floor price of 18,750 dong, but later narrowed its decline to 6.2%.

PNJ closed the session at 18,900 dong, its lowest level in nearly 10 years. The sharp correction since mid-September caused the stock's market value to lose almost half, bringing its market capitalization below 10 trillion dong.

PNJ led the Ho Chi Minh City exchange in trading volume, with nearly 52 million shares changing hands, a sharp increase compared to the first two sessions of the week. Foreign investors showed signs of accelerating their sell-off of this stock, evidenced by eight consecutive net-selling sessions, with today alone seeing a net withdrawal of over 400 billion dong.

Investment groups linked to T. Rowe Price Associates, Inc. (US) and Sprucegrove Investment Management Ltd (Canada) jointly announced last weekend that they had divested some shares. This move reduced their ownership to below 5%, relinquishing their status as major shareholders in PNJ. Specifically, T. Rowe Price Associates, Inc. sold nearly 5,5 million shares, while Sprucegrove offloaded over 19 million shares.

The recent sell-off was triggered before PNJ adjusted its business plan for this year. The company reduced its revenue target by 20% and shifted from a projected profit of 3,400 billion dong to a loss of 6,271 billion dong due to provisioning. PNJ also announced a plan to reduce its cash dividend from 20% to 10%, and intends to privately issue 550 million shares for working capital and future business plans.

PNJ stock price chart from early 2017 to present. *Photo: Tradingview*

In a document sent to the Ho Chi Minh City Stock Exchange (HoSE) to explain the series of floor-price declines last weekend, PNJ stated that the Vietnamese stock market recently experienced a correction and cautious sentiment. Some securities companies also reduced margin lending ratios for the company's stock.

"Adjusting margin lending ratios can increase selling pressure and affect liquidity and PNJ's stock price performance," the company stated.

Additionally, the changing business landscape due to incidents related to its diamond segment affected the progress of its business plan. According to the company, the frequency and volume of information released in a short period could impact investor sentiment.

Phuong Dong