June 25-29: VN Index down for 5th consecutive week

The HCM City Securities Trading Centre (HSTC) saw the fifth consecutive week of falling prices last week, when share prices decreased dramatically.

The VN Index reduced to 1,024.68 points, down by 9.01 points, or 0.9% over the previous week. As such, the VN Index lost 145.99 points in total, or 13.5%, if compared to the peak seen on March 12.

The VN Index fell in all the last weeks of June by 56.8 points, or 5.3%.

The market last week witnessed the prices of 76 share items decrease, 24 share items increase, and 7 share items stabilized in prices.

The total trading volume of the last week reached 23.7mil, or 4.7mil for every trading session. The total trading value reached VND2,616bil, or VND523bil for every trading session, a sharp decrease compared to the level of VND1tril/trading session seen earlier this year.

In the last week, BF1 fund certificates were excluded out from the list of top five securities items that saw the biggest trading volume.

Sacombank’s shares (STB) was the share item that led the market in terms of trading volume with 2.8mil traded shares, followed by VF1 (1.2mil fund certificates), FPT (the Corporation for Financing and Promoting Technologies) (1.2mil shares); SJS (the Song Da Industrial Zone and Urban Development – Sudico) (1.1mil shares), and REE (over 1mil shares).

HAX of the transport service company was the item that saw the biggest price decrease (-15.3%), followed by BMC (-21.1%), HMC (-10.5%). SJD (Can Don Hydropower), GMC (Saigon Garment), and SFI (a transport company) also saw the sharp price decreases of more than 9%, while TAC (Tuong An Vegetable Oil Company), CYC (Chang Yih) both saw the price decrease of over 8%.

Meanwhile, BBT (Bach Tuyet Cotton Company) was the item that saw the biggest and very impressive increase in price, by 26.5%, while VTA saw the increase of 18.8%, and DHG (Hau Giang Pharmaceutical) by 15.1%. Other share items just saw slight increases, including TS4, a seafood company, increased by only 6.8%.

Explaining the sharp price decreases in the last consecutive weeks, analysts said that the market was in the periodic time of falling after it was too hot several months ago. However, the situation has been worsened by the Decision No 03 by the State Bank of Vietnam, which aims to limit the loaning to securities investment. Besides, the oversupply of commodities, when a series of IPO were made in the last time (Bao Viet and PetroVietnam Insurance), has cooled the market down.

The two reasons explained why the falls have been not only seen at HSTC, but at HASTC as well.

Most of blue chips at HSTC decreased sharply in prices, namely VNM (-2.17%), STB (-1.49%), PPC (-0.78%), GMD (-3.29%), and REE (-3.85%)

The HASTC Index decreased by 15.07% in total last week, or 5.03%, to 284.7 points, the deepest low of the VN Index since January 10, 2007.

Securities information providers all said that the stock market is now in good condition. Most listing companies are performing well, the national economy remains high and maintains a stable growth rate. More importantly, Vietnam’s stock market has caught the special attention of the international investors and media. Many international financial institutions are planning to inject money in the burgeoning market.

However, the above mentioned good signs prove to be not enough to help recover the stock market, where the demand is very low. While domestic investors remain reluctant to return to the market, foreign investors are still facing limitations in investment. Foreign investors seem to have no more opportunities to buy blue chips as the foreign ownership in these companies has nearly hit the ceiling level.

An analyst from atpvietnam.com, the securities information provider, said that domestic investors still keep the wait-and-see attitude after the central bank released the Decision No 3, limiting the loans funding securities investment.

Investors do not make transactions at this moment. They do not buy shares after hearing that the final prices of the share auction were relatively low, and do not sell the shares as they would make losses with the deals, when the prices are decreasing.

Predictions about the stock market performance for the coming time vary. However, most analysts think that the market would be quiet for several more months.

Source: VNE