Vietnam Stock Market: Losing 1,000-point Benchmark

After surpassing the 1,000-point benchmark for a short period of time, VN-Index tumbled to a lower level, prompting massive selling. The order-matching value shrank significantly.

 

Big Changes Between Sessions Ending the April 16 trading day, the VN-Index lost 29.98 points to close at 983. The trading volume was modest at 5.2 million shares valued VND680 billion (US$42.5 million). The market closed with 97 decliners, two advancers (FPT and ALT) and 10 unchanged stocks. In the first session, FPT rose VND13,000 in market value to be traded at the ceiling price of VND546,000.

 

On April 17, the stock indictors were overwhelmingly red (the colour indicating depreciation of listed stocks) in spite of higher trading volume and value. The VN-Index dropped an additional 17.28 points to close at 965.72. The fall was further widened when the trading day was near to close. Among 109 listed stocks, 90 closed lower, nine higher and nine unchanged. The order-matching volume was 5.4 million units, valued VND606 billion (US$37.87 million).

 

Contrary to previous trading days, demand suddenly soared by 62 per cent to 13.5 million shares and fund certificates (in 12,557 orders), while supply fell by half to 4.5 million units (in 3,167 orders). With supply only a third of demand, the VN-Index rose by 35.40 points (+3.67 per cent) to 1,001.12 points. Most stocks were traded at ceiling prices and a large quantity of stocks remained untraded at ceiling prices. The total trading value was 3.7 million shares (-23 per cent) and 447,080 fund certificates (-30 per cent) valued VND453 billion. The market closed the day with 99 increasing stocks, five unchanged stocks and three depreciated stocks.

 

HASTC: Halved Trading VolumeOn April 16, trading value was only VND163 billion ($10 million) for a trade of 1.3 million shares. The HASTC-Index lost 25.91 points to 366.18. The market witnessed 68 out of 86 stocks ending lower, two unchanged, six higher, and 10 untraded.

 

On April 17, the HASTC-Index dropped slightly, by 0.63 points to 365.55. A total of 66 out of 86 stocks closed at lower prices, 12 untraded and eight higher. Total trading volume was 1.83 million valued VND223 billion, half that in late February and early March.

 

The market reversed on April 18 when the HASTC-Index gained 20.02 points to close at 385.57. The market closed with 62 out of 86 stocks higher. The largest advancers were NTP (+ VND18,400 a share), BMI (+ VND14,300 a share), SSI (+ VND11,900 a share), HPC (+ VND10,800 a share) and PAN (+ VND10,400 a share). Nonetheless, trading volume was only 1.4 million shares with a combined value of VND184 billion.

Expert's ideas:

 

Mr Bui Viet, CEO of East Asia Securities CompanyPossibly, hardly any positive market information could persuade investors to buy in. When the prices of stocks stood high, many investors sell stocks as they have satisfied their expectations. At the same time, recommendations and warnings from experts and the press worried investors and prompted them to sell rather than hold. However, ups and downs in stock prices are normal. Only retail investors take losses as they try to sell stocks in case of market downtrend, while confident institutional investors take gains because they have capital to buy in case of market downtrend and wait until the recovery to sell out.

 

Mr Vu Bang, Chairman of State Securities CommissionIt is said the Vietnamese stock market has been overheated and stocks far exceeded their intrinsic value. However, it is very difficult to tell the “virtual” level. Personally, I don’t know how many points the VN-Index should gain or lose. I think investors are in need of patience and wisdom at this point of time. They should survey and reconsider, especially paying attention to expert's warnings, because those are made by experienced and well-trained persons. No matter how the market develops, share values will eventually return to around their intrinsic values.

 

Source: VCBS, HASTC