HSBC publishes "Vietnam Monitor" report

The Hong Kong and Shanghai Banking Corporation (HSBC) on May 3 announced a report on Vietnam’s economy “Vietnam Monitor”, which said that foreign investors triggered the stock market fall in April.

According to HSBC, after the P/E index reached 32 in April, foreign investors decided to sell shares out to make profit, which worried domestic investors, who then sold shares in big quantities, leading to the sharp fall of stocks prices.

The trading value at the HCM City Securities Trading Centre (HSTC) decreased from $63mil in March to $47mil in April. Foreign investors bought $345mil worth of shares in January, and $158mil in February. In March, they sold shares out on 14 out of the 22 transaction days of the month, while they bought $83mil worth of shares in April only.

HSBC said that the prices of blue chips prove to be relatively expensive for foreign investors. Moreover, foreign investors do not want to buy shares at this moment as they are still waiting for big corporations to list on the bourse. Shares of big corporations like Vietcombank, Incombank, MobiFone and Vinaphone are expected to be equitised and available on the bourse in the time to come.

HSBC has also given the P/E indexes of listing companies in Vietnam. However, the indexes of several companies have been found as being false.

The Saigon Securities Incorporated’s P/E index (SSI), for example, was 251.8, while Nguyen Duy Hung, Chairman of SSI, said that SSI’s P/E was only 25.2, according to the Hanoi Securities Trading Centre (HASTC).

The information about false figures stirred up the market as HSBC is a prestigious institution.

HSBC on May 14 had to announce the changes in its report, admitting the errors in calculating the P/E indexes of SSI and four other companies: Bao Viet (BVS), Vinare (VNR), the Petroleum Services and Drilling Company (PVD) and But Son Cement Joint Stock Company (BTS).

In a report announced in early May, the P/E indexes of the four companies are 59.1, 76.4, 108.7 and 6.2, respectively. In the new report, the information about the four companies’ P/E remains absent as HSBC still needs to get updated information.

HSBC’s representative has attributed the errors to the lack of source materials. He said that the changes in the P/E indexes of several companies did not affect other conclusions released in the report.

Full report: HSBC's "Vietnam Monitor"

Source: VNE