April has come and investors fear that 2006’s gloomy April will repeat itself with share prices down and market freezing. However, they have been assured that history will not repeat itself in this case.
Securities expert Huy Nam said that the periodic April fall would not happen again this year as the market was always timely intervened with to prevent sudden falls and increases.
In fact, share prices fell down considerably in past weeks, but the market has recovered slightly with the VN Index hovering at 1,000-1,100 points.
Big investors in the market, both domestic and foreign, do not always follow the crowd: they buy shares when others sell, and sell when others try to buy.
On April 2, 2007, for example, foreign investors bought 2.3mil shares, but just sold a little more than 1mil units. Blue chips all decreased in prices, but the traded volume of these shares items was still big.
Bui Viet, Director General of the EAB Securities Company, asserted that this April would not be as gloomy as last April. He said that the market would see slight fluctuations instead of sharp increases and decreases.
The statements made recently by State, National Assembly and Government leaders that the stock market must be kept in normal operation have made experts believe that there would be no big falls in the market. Recently, rumours about the tightening of foreign capital flow have been denied by state management authorities.
Dang Ngoc Thang, a securities analyst, said: “No one can know for sure what the market will be like, but I’m sure that when the market goes down dramatically, it will be intervened with to recover soon.”
Foreign investors also share the same view that the stock market will not witness falls in April as it did last year. The director of a foreign based investment fund said that many funds had finished the holiday term and returned to transactions. These funds are waiting for prices drop to buy shares in large quantities; therefore, there would not be any sharp price decreases.
Meanwhile, Nguyen Hung Nam, an investor on the ACBS trading floor in HCM City, said that some big investors, who left the stock market for the real estate market, have returned to inject money in securities as the real estate market turns out to be ‘overly hot’, where the prices are abnormally high.
Analysts said that a lot of big accounts with account balances of more than VND500mil have been opened in the last few days at SSI, ACBS, VCBS and SBS.
Securities prices may fall, but very slightly
Dr of Economics Nguyen Quang Hung, a Viet Kieu in the US, who is a lecturer at several universities in HCM City, said that the VN Index might fall to below 1,000 points in June, when there are more commodities on the market. By that time, many big groups will make IPO (initial public offering) while the state will sell parts of its shares in companies in order to reduce state ownership proportion.
As a matter of course, investors will wait for some more time to buy valuable commodities, like Vietcombank, Incombank or Mobifone shares. Bringing more choices proves to be the best remedy to cool down the market.
Meanwhile, the hot real estate market, which promises bigger profit than the stock market, will lure securities investors as well, thus cooling the stock market down.
Vo Huu Tuan, Deputy Director of Bao Viet Securities Company, on one hand, admitted the factors that can lead to the price decrease, and on the other hand, asserted that the sharp falls in the market would not happen.
In the last month, any time the VN Index has gone down to below 1,000 points, share prices increased again, he said.
Big investors and state management authorities will not let the market plunge sharply and for a long time. If so, the public will lose confidence in the stock market, which will make it hard to recover the stock market and cause bad consequences.
“I do not believe that Vietnam’s stock market will see the gloomy April once again,” Mr Tuan said.
Source: VNE mekong capital equity vinacapital
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