Increasing numbers of stock market players are selling off their blue-chip shares during the current market downturn and reinvesting in lower-price shares with greater potential for growth.
Statistics from recent sessions showed that investors have been increasingly interested in shares at the lower end of the market, with transaction volumes in shares such as Binh Trieu Construction and Engineering Corporation (BTC), Sai Gon Beverage Co (TRI) and 620-Chau Thoi Cement Corporation (BT6) several times higher than two weeks ago.
Insiders have suggested that blue chips were less attractive to domestic investors as share prices have tended to be stagnant during the recent volatility at the bourse. Many investors, who bought when prices were high, feel compelled to cut their losses and look for more profitable investments.
The director of one securities company, who requested anonymity, attributed the shift of investors to lower-priced shares to a recent State Bank decision that capped commercial bank loans made against securities collateral to less than 3 per cent of their total lending.
Despite good business performance results reported in the first half of the year, market prices of many blue chips including Sai Gon Thuong Tin Commercial Bank, Asia Commercial Bank, FPT and SAM have all fallen.
The head of the Hai Phong Securities Co’s consultating division, Dao Trong Tien, attributed the declining prices of blue chips to announced plans of many of these companies to issue more shares in the near future.
Asia Commercial Bank announced plans to issue an additional of 143 million shares in July. FPT expects to issue 30 million additional shares this year.
Millions of shares have also entered the market via the IPOs of such major firms as Phu My Fertiliser, Bao Viet Insurance and PetroVietnam Insurance, diluting the pool of blue chip shares and contributing to stagnation in prices, said Tien.
Source: VNS
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