The average price of listed stocks at Ho Chi Minh City Securities Trading Centre (HSTC) dropped nearly 14 per cent, or 147.77 points, in April. According to experts, the Vietnamese stock market is positively developing. The current downtrend conforms to the market rule after a period of overheated growth. This fall does not signify bad operation by listed companies. In fact, according to information released by listed companies, business operations are very good and profitable for stock investors. This downtrend has already been forecast by many people. However, many are wonder whether possible downtrend corrections will continue in May.
VN-Index: Slight rise
After a week-long holiday period, the stock market kept recovering. On the May 2 trading day, the number of inflating stocks was not as high as the previous session before the public holiday, but growth was more solid as the VN-Index increased call by call of transactions. In addition, though many investors have not yet returned to the trading floor after the long holiday, the trading volume and value was higher than the April average. The VN-Index gained 11.59 points, or 1.25 per cent, to 935.48. The total trading volume was down 9 per cent against an earlier trading day [April 25] to nearly four million shares valued VND547 billion (US$34.18 million), down 3.5 per cent.
At the closing call of the May 3 trading session, the VN-Index slightly gained 1.98 points, or 0.21 per cent, to 937.46. The market saw 31 stocks ending higher, 30 stocks unchanged and 48 stocks lower. However, aggregate trading value declined sharply to only 3.779 million units valued VND468.542 billion, including 3.348 million shares worth VND454.632 billion, down 29 per cent and 21 per cent respectively.
HASTC -Record Low Trading VolumeThe first trading session of May on the Hanoi Securities Trading Centre (HASTC) witnessed the lowest transaction volume since the beginning of 2007. A total of 974,300 shares changed hands with a combined value of VND117 billion on May 2, down 35.4 against an earlier session. This was the second smallest trading volume since early 2007, and the smallest session fell on the first trading day of 2007. A majority of listed stocks saw prices rise, but depreciation of some biggies pulled down the HASTC-Index by 3.55 points to 329.24.
On May 3, the HASTC-Index lost an addition of 5.75 points to 323.49. The total trading volume and value plunged to a record low level of only 750,100 shares traded at total value of over VND74 billion.
Several experts said Vietnamese stock indexes normally drop to the lowest level in May. However, this is only experience and this year’s situation may be different because of the earlier fall of stock prices.
The upcoming listing of many stocks, including issues from Vietnamese largest firms, may lead to a sharp price fall of many penny stocks but the new issues will push up the stock indexes. Liquidity will increase, not decline, because more big institutional investors will join the market. Some securities companies also said the number of institutional investor accounts is sharply rising.
In addition, Vietnamese economic growth is forecast to maintain its high rate. According to the report released by the Central Institute of Economic Management (CIEM) on April 23, Vietnam’s GDP growth is estimated at 8.5 per cent while CPI growth is 7.7 per cent. Some US$35 billion from foreign companies and organisations is ready to enter Vietnam through foreign projects. Therefore, predictions are bright for the Vietnamese stock market in the third quarter 2007.
Van Anh
Vietnamese
