Viet Nam’s stock indexes kept climbing to new heights right after a ten-day break for the country’s traditional new year festival (Tet), despite warnings by analysts of the market overheating.
The VN Index, which measures the value of the Ho Chi Minh City Securities Trading Centre, on the Feb. 27 morning trading session rose to a record high of 1,167.36 points.
The previous day was the first time in the center’s six-year history that all stocks recorded gains. The prices of 103 of the 107 listed shares increased, bringing the VN Index to 1,129.02 points with a rise by nearly 45.77 points, or 4.23%. This was the first time VN Index passed the 1,100 point mark and also the first time it increased by more than 40 points.
The HaSTC Index on the Ha Noi Securities Trading Centre, meanwhile, rose to 433.83 points at the end of the morning session today after hitting 409.23 points on Feb. 26 thanks to a record increase by 31.64 points or 8.38%.
In HaSTC’s first session of the lunar new year, all but six stocks recorded gains with many approaching their price ceilings, including Bao Minh (BMI) and International Labour and Service (ILC).
The trading frenzy in both the north and south caused overcrowding at brokerages. Bao Viet, Sai Gon Securities all reported facilities being packed to capacity.
Dinh Chung, an investor from Ha Noi's Thanh Xuan District, said that he and a friend decided to pour more money into the market because they believed there is still room for further gains over the coming week, despite many stocks trading well above normal price-earnings ratios.
Tran Dac Sinh, director of the HCM City exchange, said there are a number of risks involved with buying into the market now and warned investors to be cautious.
Last week, Deputy Prime Minister Nguyen Sinh Hung denied claims made by press agencies that the Government would curb foreign capital flow in the stock market.
The Deputy PM said Viet Nam has no intention of controlling the market through administrative orders.
He was responding to reports by Bloomberg and AFP quoting ANZ Bank analysts as saying that bourse officials may adopt measures to restrict foreign capital flow in order to cool trading.
"Many say that the stock market has grown too hot, but I say it isn't hot," Hung told officials at the State Securities Commission (SCC) during a meeting on Friday. "The important thing is to ensure that the market develops in a stable and sustainable manner, and not to always worry about whether it's hot or not."
The Deputy PM also instructed the commission to punish investors who have violated securities laws.
SCC Director Vu Bang admitted regulators have been more concerned with market development, and less so with taking punitive action against investors and brokerages.
He assured officials, though that the commission is committed to bringing violators to justice.
Source: VNA
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