Inadequate Support for Stock Market

The Vietnamese stock market has entered tug-of-war period amid the presence of both positive and negative markets. The liquidity waned as investors were divided or decided to sit on the sideline to wait for more information from the annual general meetings of listed companies.

The VN-Index dropped 3.53 percent, or 17.85 points, to close at 487.57 points on the January 18 trading session but trading value surged to nearly VND1,800 billion, a rise of nearly 50 percent from the preceding trading date. The appetite for shares strengthened as many investors anticipated shares started to bottom out but the sell-side was ready to offload their shares to exit uncertain markets. The VN-Index erased gains in the past two weeks.

 

On January 19, the VN-Index took back half of its loss in the preceding trading date. The measure added 8.38 points, or 1.72 percent, to 495.51 as blue-chips rallied. However, the market liquidity slumped to 33.63 million shares valued at VND1,449 billion. Remarkably, newly-listed ASM of Sao Mai Construction Corporation was much-hunted by investors. At the market close, the buy-side ordered nearly 1.5 million shares in ASM but the sell-side only discharged 10 shares, totalling 560,000 shares through the day.

 

Other ceiling gainers included MCG, PNJ, PVD, TCR, TNC and VNM. Blue-chips like HAG, HPG and KBC also rose high, only VND500 -1,000 short of ceiling prices, which are capped at 5 percent from the reference prices. HAG added VND3,000 to close at VND80,500. FPT, GMD, SJS and PVF also leapt high.

 

According to experts, the season of releasing business reports is coming and corporate performances will affect the market. In the near term, the market will be driven by consumer price index in January and prime rate information. But, share prices are expected to widely divide after corporate earnings in 2009 and the fourth quarter are announced.

 

On January 20, the VN-Index slid 6.01 points, or 1.21 percent, to 489.5, with nearly 36 million shares traded at VND1,634 billion. In blue-chip group, VNM advanced nearly 5% to VND78,000, FPT added VND1,500 to end at VND79,000 after Vietnam’s largest software producer announced the revenue hit US$1 billion benchmark. Meanwhile, DRC sank to the floor price after the rubber price surged 50 percent from 2008. PVD also hit the lowest intraday price to VND60,500, SJS dropped VND2,500 to VND75,000. SSI, STB, NTL, ITA, KBC and KDC also nosedived.

 

On January 21, global investors offloaded shares and Vietnam was an exception. The liquidity improved with 42 million shares changed hands at a value of VND1,862 billion. The VN-Index retreated 11.08 points, or 2.26 percent, to 478.42 points although it shortly entered the positive territory.

Like movements on HOSE, on January 18, the HNX-Index, the gauge of the Hanoi Stock Exchange (HNX), sank 6.83 points, or 3.99 percent, to 164.54. Up to 107 stocks closed at floor prices, which are capped at 7 percent. ICG, PVA, STL, TAG, VGS, shares in Song Da Corporation’s affiliates led the downswing. Notably, S96 also hit the floor price after gaining nearly 70 percent in the first two weeks of 2010. The market volume totalled 22.5 million units valued at VND735 billion.

 

On January 19, the HNX-Index added 1.36 points, or 0.83 percent, to 165.9 as most of shares advanced. The total trading volume declined to 19.4 million units worth VND661 billion.

 

On January 20, the HNX-Index retreated 4.85 points, or 2.92 percent, to 161.05. Although it gained in early hours, the waning demand sank the market. The market liquidity continued to drain, with only 18 million units transferred at the value of VND575 billion. KLS was the most active on a trade of more than 2.8 million units, followed by VGS (2.12 million shares), VCG (1.46 million shares) and PVX (1.08 million shares).

 

On January 21, the HNX-Index plunged 3.41 points, or 2.12 percent, with nearly 24 million shares traded with a total value of VND782.14 billion.