Updated  
June, 27 2012 09:58:00

Poor earnings depress market

HA NOI — Shares continued their losing streak yesterday on the HCM City Stock Exchange, with the VN-Index closing down by over a per cent to 419.19 points.

The value of trades also sagged by over 25 per cent from Monday's pace to a mere VND744.9 billion (US$35.4 million). Volume reached about 50.5 million shares.

Gains by three stocks – Eximbank (EIB), commercial baker Kinh Do (KDC) and PetroVietnam Drilling Services Co (PVD) – failed to lift the VN30 Index, which retreated by 0.9 per cent to conclude yesterday's session at 493.73 points.

The cause of the current market doldrums included disappointment over corporate earnings in the second quarter, said Alan T Pham, chief economist of investment management firm VinaCapital.

Auditors had pinpointed a number of troubled companies which would likely fail due to insolvency, he noted, including coffee processor Thai Hoa Group (THV); TNG Investment and Trading Co (TNG); construction firms Hanic (SHN), Vinaconex 11 and Vitaly (VTA); logistics company Vinaship (VNA); South East Asia Hamico Export (KSD); and Truong Son Securities Co (TSS).

A common feature of these firms was liabilities that exceeded liquid assets, he noted.

Pham predicted, however, that businesses would be able to more easily access capital in the third quarter.

"While monetary policies need more time to take effect, fiscal policies are being implemented rapidly, actively supporting the stock market," he said.

On the Ha Noi Stock Exchange yesterday, the HNX-Index also fell by nearly 1 per cent to 71.11 points. The value of trades managed a slight increase over the prior session, however, reaching VND445.8 billion ($21.2 million) on a volume of 47.8 million shares.

VNDirect Securities Co (VND) was the most-active share nationwide with 3.6 million traded.

Benchmark indices on both exchanges had declined for four successive sessions, falling below their support levels, FPT Securities Co analysts wrote in their daily report.

"Investor psychology has shifted from caution to fear, causing higher sell pressure," they said. While some bottom feeding has appeared, they added, it was not enough to alter the prevailing market trend. — VNS

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