July 16-20: one trading session up, four down

The market remained quiet last week with transactions of shares and fund certificates down considerably.

Only one trading session saw the VN Index increase, while the other four sessions witnessed sharp price decreases. The same scenario happened at both the Hanoi and HCM City Securities Trading Centres.

Foreign investors also reportedly had low trading volume last week. In HCM City, they reduced their volume of purchases, while they sold twice as much as two weeks before.

Analysts say that domestic investors are insecure about the market as foreign investors seem to be not making any moves: they are still waiting for the big IPOs slated for the last five months of the year and early 2008. Investors do not have any information about whether or not the government will delay the IPOs of four state owned banks and 20 big general corporations previously scheduled for 2007.

Most analysts, both domestic and foreign, think that the delay of IPOs, if decided upon by the government, will have negative impacts on the stability of the stock market’s development, and slow down economic growth in the coming years.

Some experts have said that the total sum of VND50tril ($3,125mil), the value of the IPO shares to be issued by four state owned banks and 20 big corporations, is nothing compared to the foreign portfolio investment capital of $4bil to be flown into Vietnam from now to mid 2008. If foreign investment funds are kept waiting any longer, they will feel discouraged and inject their money in other countries rather than Vietnam.

In HCM City from July 16-20, the VN Index once again slid after rebounding the previous week. The VN Index continuously decreased in the last three trading sessions by 24.42 points. HASTC’s Index rose in one session, while fell in the four others by 9.95 points to its record low, surprising every investor.

However, analysts said that penny stocks, especially ones of construction and construction material companies, tended to increase in price.

Several companies have announced their business results for the first half of the year, all of which were very satisfactory, but the optimistic reports could not warm the market up.

At the HCM City Securities Trading Centre, investors registered to purchase 40.34mil units of securities, the same volume as the previous week. There were orders to sell 34.71mil units, down by 3mil.

The five securities items which saw the biggest trading volume under the form of order matching included STB (2.434mil units, down by 200,000 units over the previous week, worth VND150bil or $9.37mil), FPT (1.882mil shares, up by 550,000 units), HTV (0.723mil units), VF1 fund certificates (0.639mil units), and REE (0.630mil, down by 300,000 units).

In HCM City, the volume foreign investors sold increased sharply, while the volume they purchased decreased. They bought 3.45mil shares (- 1mil), worth VND468bil, and sold 2.68mil shares, double the previous week’s level, worth VND583bil.

In Hanoi, the transaction volume of foreign investors decreased over the previous week. They bought 642,300 shares (- 250,000 units), worth VND71.2bil, and sold 112,000 shares, down by 30,000 units, worth VND10.91bil.

Source: VNE