Foreign Investors Sell 35M PNJ Shares, Stake Drops to 41% Amid Diamond Scandal

Overview

Foreign investors have sold approximately 35 million shares of Phu Nhuan Jewelry (PNJ) over three weeks, reducing their ownership to 41% of the company. The selling pressure comes as PNJ’s stock price has fallen more than 51% since early July, triggered by a diamond smuggling scandal at its wholly owned subsidiary P-Lab. The sell-off has opened up foreign room to nearly 40 million shares, while PNJ’s market capitalization has dropped by over VND 16.5 trillion.

Key Facts

• Foreign investors sold about 35.51 million PNJ shares in three weeks, reducing their stake to 41% of the company’s capital.
• Foreign room at PNJ has increased to over 39.71 million shares.
• PNJ’s stock price closed at VND 30,750 on July 26, down 51% from the start of the month.
• Trading volume hit a record high of 41.3 million shares in a single session.
• PNJ’s market cap fell to approximately VND 15,735 billion, losing over VND 16,550 billion in less than a month.
• The diamond smuggling case involves a former director of P-Lab, a subsidiary 100% owned by PNJ.
• PNJ has changed its buyback policy, paying customers in five installments over up to 120 days.

What Happened

Foreign investors have been net sellers of PNJ shares since the diamond smuggling scandal broke in early July. Data from the foreign ownership limit shows that foreign-held shares dropped by about 35.51 million units, equivalent to nearly 7% of outstanding shares, reducing their stake to approximately 211.11 million shares or 41% of the company. The selling has been relentless, with PNJ’s stock hitting the floor price repeatedly and recording its highest-ever trading volume of 41.3 million shares in a single session.

The scandal involves a former director of P-Lab, a subsidiary wholly owned by PNJ, accused of diamond smuggling. PNJ has stated that the diamonds in question were not introduced into its retail system and that all diamond products sold are certified and traceable. The company has set up a special supervisory team at P-Lab, including two independent board members, to strengthen controls. Management has apologized to customers and shareholders and committed to honoring buyback obligations, though the buyback policy has been stretched to five installments over 120 days to manage liquidity.

Market Context

PNJ shares on HOSE have lost more than half their value since the scandal emerged, with the stock closing at VND 30,750 on July 26. The sell-off has erased over VND 16.5 trillion in market capitalization. The foreign selling has been a major driver, with net foreign outflow estimated at USD 14.2 million over the period. The broader retail sector has also been under pressure, but PNJ’s decline is company-specific. The stock is now trading near its lowest levels in years, and the foreign room opening may attract new buyers if sentiment stabilizes.

Strategic Significance

The scandal has damaged PNJ’s reputation and raised questions about corporate governance at its subsidiary. The sharp foreign sell-off indicates a loss of confidence among international investors, who had previously held a significant stake. PNJ’s decision to alter its buyback policy to manage liquidity suggests potential cash flow strain. However, the company’s underlying retail business remains strong, with July retail sales up nearly 20% year-on-year. The 2026 targets of VND 48,660 billion in revenue and VND 3,409 billion in net profit imply a recovery trajectory. The key for long-term investors is whether PNJ can restore trust and stabilize its stock price, and whether foreign investors will return once the scandal is resolved.

What to Watch

• PNJ’s Q3 2026 earnings report, due in October, to assess the financial impact of the scandal and buyback costs.
• Any further developments in the diamond smuggling investigation, including potential legal actions or fines.
• Changes in foreign ownership levels and whether the foreign room fills up again.
• PNJ’s progress on its 2026 business plan, particularly retail sales growth and margin recovery.
• Announcements regarding the special supervisory team’s findings at P-Lab.