Vietnam’s stock market was the world’s worst performer this week with an 8.5% decline.
It was followed by Russia, down 4.8%, and Venezuela, down 1.87%, according to market data provider StockQ.
Over the last four weeks Vietnam has been the world’s second worst performer behind Russia, with the VN-Index falling by 16.67%.
The VN30 basket, comprising the 30 largest capped stocks, declined by 18.51% in the period.
Some of the worst performers were private lenders Techcombank and VPBank and electronics retail chain Mobile World.
The State Bank of Vietnam raised its policy rates last month to control inflation.
The dollar has been rising to new peaks against the dong as well as most other currencies amid rising interest rates in the U.S. and geopolitical tensions.
“Margin call pressure forced investors to sell off recently and the panic among investors has not subsided yet,” Phung Trung Kien, founder of asset management firm Vietnam Holdings said.
“Cash flow to the market is quite limited these days as most of the important rates such as interbank interest rates have been increasing a lot.”
Nguyen Anh Duc, head of institutional sales at SSI Securities Corp, said retail investors are “extremely panicky and they are taking flight without regard for which stocks they are selling.”
But some investment funds, such as Coeli Asset Management SA and Asia Frontier Capital are looking to buy more of Vietnam stocks given the country’s long-term economic prospects.