VN-Index drops below 450 point mark (20/05/2008)

The VN-Index saw no sign of recovery as it continued to see its 12th consecutive declining sessions on May 20, dropping below the 450-point mark.  

Specifically, the market indicator of the southern bourse lost 6.43 points today or 1.41% to close at 449.24.  

Only 2.6 million shares and fund certificates were traded today via order matching worth VND 95 billion, plus 2.4 million shares and 1.3 million bonds traded via negotiations for VND 199 billion. 

Only ten stocks reported gains while 132 others declined, 130 of them hitting floor prices, out of the total 154 stocks listed on the Ho Chi Minh City Stock Exchange.  

DPM continued to the take the top position among the most traded stocks with over 550,000 units matched, followed by SSI, BMI, SBT and VIP.  

Foreign investors bought over 800,000 shares worth VND 32.5 billion while sold 157,000 shares worth over VND 9 billion.  

The same situation was seen in Hanoi bourse as it experienced its 13th decrease in a row. Only ten stocks were gainers while up to 95 stock were losers out of the total 137 listed stocks. Only 1.1 million shares were traded today for a total VND 25.5 billion.

The HASTC-Index closed at 135.21 on May 20, down 1.84% or 2.53 points.  

The northern bourse today welcomed one more stock, YBC of the Yen Bai Minerals and Cement Joint Stock Company. Ending its first trading day, 22,400 YBC shares was matched at an average price of VND 18,100 a unit. 

The VN-Index at the Ho Chi Minh City Stock Exchange (HoSE) plunged 34.47 points or 4.63 percent to finish at 710.45 points with around 20.1 million shares, worth over 1.7 trillion VND, changing hands.

Tu Liem Urban Development Co. (NTL) topped the list of 147 losers after having 13,000 VND wiped off its listed price, followed by Binh Dinh Minerals (BMC) and Tay Ninh Cable Tour (TCT) (both 12,000 VND), and Song Da Urban & Industrial Zone Investment and Development (SJS) (10,000 VND).

Affected by the southern bourse’s downward trend, the HaSTC-Index at the Ha Noi Securities Trading Centre dropped 19.28 points or 7.5 percent to close at 237.89 points. More than 4.5 million shares, worth close to 269 billion VND, were traded.

Investors said that the local stock market’s deep decline was attributed to rumours of increasing instabilities in the US economy and skyrocketed petrol and gold prices.

The State Bank of Viet Nam’s recent adjustment in monetary policy also contributed to the market’s downward trend.

According to an expert from the SBS-Sacombank Securities Company, despite cheap prices, investors dare not buy more shares at the time because the macro economic situation hasn’t showed any positive sign yet.

“If there is no positive news in the next several days, VN-Index may dip below the 700-point mark,” said an investor at the SBS-Sacombak floor

Deputy Prime Minister Nguyen Sinh Hung has requested that foreign investors be allowed to hold a maximum of 30% stake and one foreign investor be allowed to hold a maximum of 15% stake in the to-be-equitised PetroVietnam Financial Company (PVFC), according to a new document issued by Governmental Office dated October 8.

These proportions are being applied to commercial banks, including listed ones.

PVFC is currently among the biggest financial institutions in Vietnam and is also the first State-owned financial company to be equitised. PVFC’s first initial public offering, scheduled for October 19, is attracting great attention from investors. The company will offer over 59.6 million shares at an initial price of VND 51,000 a share. After equitisation, the company will have a charter capital of VND 5 trillion.

The VN-Index fell for the first time in four sessions yesterday with analysts predicting further declines as the market goes through a minor adjustment.

The index slipped 1.6 per cent to 1,087.78 points, though turnover remained strong at 15.4 million shares, worth VND1.56 trillion.

"Despite the fall, the market remains very strong because money continues to be poured into the exchange," said Nguyen Minh Ngoc, an analyst at Kim Long Securities, in an interview last night.

Ngoc said many new clients have opened accounts and investors who have avoided trading for months are injecting more cash into the market.

She predicted the VN-Index will fall again today, but will likely rebound early next week.

Demand for Can Tho Technical and Material (TSC), a relative newcomer to the HCM City Stock Exchange, was high with buy orders totalling nine million shares. Only a limited number of orders were executed.

TSC opened yesterday at VND48,000, up 20 per cent compared to its initial price.

Nguyen Thanh Trung, investment director at Trang An Securities, said yesterday that many investors expect a similar trend in Sai Son Cement (SCJ) shares.

SCJ, though, closed at VND151,000 yesterday, down 2.51 per cent on profit taking.

There was a major sell off in blue chips with Hau Giang Pharmaceuticals (DHG) and Binh Dinh Minerals (BMC) dropping to VND399,000 and VND486,000, respectively.

In contrast to the main trading board, the Ha Noi Securities Trading Centre’s HASTC-Index climbed 1.14 per cent to 349.48 points with turnover at 5.3 million shares worth VND611.2 billion.

Song Da 7 (SD7) and Saigon Securities Inc (SSI) hit their ceiling prices after rising 10 per cent to finish at VND277,000 and VND253,500, respectively.

Foreigner investors were net buyers at only VND29 billion on the main board and VND70 billion on the Ha Noi exchange.

Last week, both trading volume and value on the Hanoi Securities Trading Centre increased sharply. Though HASTC-Index saw slight decreases on the last two trading sessions of the week, but it can be seen that the market has really escaped the decline period and a new trend is being established with bigger fluctuations.

HASTC-Index increased the most on the September 19 trading session, up 7.96 points. Up to 71 stocks gained. In this session, total trading volume was up 110.03% compared to the previous trading session, reaching over 2.7 million, with a total trading value of over VND 222.6 billion.

On September 19, SCJ shares of the Sai Son Cement Joint Stock Company made its debut on the Hanoi bourse. Though this is the fifth cement stocks on the bourse and the company’s scale is not big, up to 208,200 SCJ shares were traded right in their first trading session at VND 82.400 a share.

This has proved that shares of the construction and construction materials sector have continued to maintain a key role on the northern bourse.

As of September 19, the HASTC-Index had increased for ten consecutive sessions with a total gains of over 23 points. Though prediction was made since the previous week when HASTC-Index gained slightly session-on-session, the index’s sharp increases on the two sessions of September 18-19 surpassed expectations by both investors and experts.

Will the market reverse?

After ten consecutive gains, the northern bourse witnessed correction on the last two trading sessions of the week. HASTC-Index was down slightly by 3.03 points and 1.11 points respectively.

The increase in the number of losing stocks have caused concerns among investors that the market will dropped sharply next week.

However, this situation is hard to occur as HASTC-Index was only down slightly, mostly focusing on stocks with low market prices while trading volumes were still high, at nearly 2 million shares a session.

In these sessions, bid surpluses were bigger than offer surpluses. On trading floors at securities companies, in general investors were still very enthusiastic. Few people sold their shares when the market was in a correction period. Most of them still keep their shares and wait for the market to rebound and continue to buy more shares at reasonable prices.

Another reason for the levelling off of the HASTC-Index was that certain investors had accumulated in the short-term investment and sold the shares when they were at a higher prices.

In the last two trading sessions of the week, most of the stocks of Song Da Corporation subsidiaries declined. However, the adjustment in prices of these stocks is normal.

One of the reason for this is that this week, investors paid their attention to the two newly listed stocks of CSJ and PVS. This has shown that demands on the Hanoi bourse are still big and are investors are ready to welcome quality stocks.

Next week, the market may continue to see slight correction, however the trend of increasing prices is quite obvious. The HASTC-Index will not see any sudden increases. With these developments, it is hard for investors to have correct prediction. Experts’ advice for investors at the current time is that investors should focus on blue-chips and should not hastily sell their shares when the market was down for several sessions.

Last week, the domestic stock market continued to prosper with the VN-Index once exceeding the 960-point level.

During the five sessions of last week, VN-Index increased in four sessions and was down only in one session, increasing a total of 28.21 points compared to the previous week.

Ending the September 21 session, the VN-Index dropped after seven consecutive increases, losing 4.94 points (or 0.51%) to 958.67.

However, total trading volume reached 10.88 million units worth a total value of VND 934 billion, the highest since March.

According to experts, the reason for the slight decrease of the VN-Index in the last trading session of the week was that many investor decided to sell their shares for short-term profit after the VN-Index’s successive gains earlier with total increase of 43.13 points.

The market is showing a positive development trend. This can be most clearly seen in the debut highly attractive new products to investors such as Vincom (VIC), Petropetco (PET) and Petroleum Technical Service Corporation (PVS).

In addition, most of the listed enterprises on the Ho Chi Minh City Stock Exchange are operating well. The recovery of bank shares last week especially added momentum to the market.

The strong recovery of ACB and STB, the two listed bank stocks contributed to the increase in prices of some other bank stocks on the OTC market.

The world stock market has recovered quite strongly after the US’s Fed decision to annual interest rates from 5.25% to 4.75%. This has contributed to the strong recovery of stocks in Asia and this has encouraged domestic investors.

However, the current hike in prices of crude oil and gold may more or less affect securities prices in general, therefore, revealing the general instability in global stock markets.

Manulife Vietnam Fund Management Company has sold out of its first close-end mutual fund’s 25 million issued units, announced the firm over the weekend.

The Manulife For Progressive Fund (MAFPF1)’s shares went up for sale July 19 and had fattened the company’s pockets to the tune of for US$15.4 million (VND250 billion) by the time the fund closed today.

The certificates were sold at the face value of VND10,000 each, according to the fund manager.

The Asia Commercial Bank Securities (ACBS), Bao Viet Securities and Saigon Securities Inc had distributed the fund certificates which wooed more than 1,000 retail and institutional investors.

Manulife now plans to list on the Ho Chi Minh Stock Exchange (HOSE).

The fund will invest from 65 to 95 percent of its capital in listed shares and up to 25 percent in the over-the-counter market. The remaining 10 percent will be kept in cash or debt instruments.

The Manulife Vietnam Fund Management Company - a wholly-owned subsidiary of the insurer Manulife Vietnam – specializes in fund management and financial investment consulting.

The fund management company now manages a VND3 trillion portfolio authorized by Manulife Vietnam, a branch of the Canadian-based Manulife Financial.

According to the State Securities Commission (SSC), numerous investment institutions and brokerage houses are applying to set up fund management arms to capitalize on the domestic finance market.

HOSE – Vietnam’s main board -  is home to the two mutual funds, VietFund (VFMVF1) and Prudential Balanced Fund (PRUBF1).

HCMC-based Dong A Securities is preparing to establish a fund management , which will focus on both listed and unlisted companies.

Dong A Securities and its partners plan to pool some VND200 billion ($12 million) for the fund.

Dominic Scriven, Director of Dragon Capital, one of the earliest foreign investors in Vietnam, said that there was nothing in the stock market to worry about.

In a talk with the press recently, Mr Scriven said that the stock market always grew rapidly in the first months of the year, and then began falling down in April and the falls lasted until August and September. The circle seems to be also the tendency seen in the world’s stock markets.

His words can be understood to mean that the falls in the market recently should be seen as a normal thing in the cycle of a stock market’s performance.

According to him, Vietnam’s stock market since the beginning of 2007 looks like the one in the same period of 2006. At the beginning of the year, the market prospered because investors were optimistic about the national economy and listing companies’ business performances, which helped create the bustling stock market.

When the summer, April and May, comes, the stock market does not have much information. For example, a project which is announced at the beginning of the year only sees results at the end of the year. There is a proverb in English that expresses this: ‘Buy in May and go for holiday’.

Vietnam’s stock market, according to Mr Scriven, has its own characteristics: investors buy and sell shares by feeling, while not relying on any analysis. Meanwhile, listing companies try to issue additional shares, while they are unable to forecast the purchasing power in the market. As a result, the selling volume is higher than the purchasing power.

He has advised companies to reconsider the issuance of shares to raise chartered capital as this work would affect the purchasing power, and the PE index.

For example, if the PE index of a company is now 20 and its profit grows by 50%, and if the company increases its chartered capital by 50%, the PE would still be 20 at the end of the year. If so, it makes no sense to try to increase the profit, and the value of the company’s shares would remain unchanged.

 

When asked to make forecasts about the stock market in the time to come, Mr Scriven said that the market would inch up slightly, when listing companies announced their business results.

Regarding the controversial question about whether to delay the equitisation process of big corporations, Mr Scriven said that the government of Vietnam should not delay the process, which has very big political, social significance, while it still plays important role in the restructuring of the national economy.

Vietnam should not stand apart from the equitisation even if the market continued to fall further. The equitisation is the most attractive factor in the eyes of foreign and domestic investors, and if the equitisatiion is delayed, the interest of investors will no longer exist.

Returning to the forecasts about Vietnam’s stock market, Mr Scriven said that there was nothing to worry about, as it is expected that the average PE would be 20 in 2008 as many companies show impressive growth rates.

Regarding the business of foreign investors in Vietnam, Mr Scriven said that most of them who joined the market at the end of 2006 and early 2007 have made losses instead of profit. The crisis, now being spread in many stock markets, may make investors hesitate to inject more money in stocks because they don’t want more risks. However, foreign investors still think that it would be better to be in Vietnam rather than in the US at this time.

31/8/2007

There are few signs that foreign investors are picking up their capital and heading home from the Vietnamese securities market after drawing more than 2.6 billion USD from Asian markets within the last week.

This week alone, foreign investors purchased 6.1 million shares valued at nearly 688 billion VND, while offloading haft of that amount for close to 403 billion VND.

At the Ha Noi Securities Trading Centre, foreign investors ordered shares valued at more than 48 billion VND but only 9.4 billion VND worth of shares were offered.

The State Securities Commission said that since early this week, investors from abroad had accounted for over 20 percent of the market’s total transaction value and also the holders of between 25-30 percent of the total volume of listed shares.

Viet Nam has not been affected by what has been occurring in other Asian markets, Asian Development Bank Country Director Ayumi Konishi said, citing the modest volume of capital poured into Viet Nam by foreign investors as one of the major reasons