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Investors caught in bull trap

Update: July, 28/2012 - 08:21

 

Investors follow the on-line securities-transaction board in the rooms of the Agriculture Securities Co. — VNA/VNS Photo Hong Ky
HA NOI — Shares finally lost value after posting gains earlier yesterday morning.

After last week's false indication that the market was heading upwards – a so-called bull trap – it was actually heading for a medium-term fall, said Bao Viet Securities Co analyst Nguyen Xuan Binh.

Many investors were not able to completely cut their losses. "This increases the probability of shares declining in the absence of a new cash flow while selling pressure remains high," he said.

Investors expect the deposit-rate ceiling will decrease one per cent further. "However, this information will hardly create enough big changes," Binh said.

"Lending rates and the consumption of stockpiles of products are instead the focus of attention."

On the HCM City Stock Exchange, the VN-Index finished at 413.16 points, a 0.4 per cent decrease compared to Thursday's close.

More than half of all listed shares were decliners.

Trading value, however, jumped 49 per cent over the previous session to VND620.2 billion (US$29.5 million) on a volume of 38.3 million shares.

The VN30, which tracks the southern bourse's 30 leading shares in terms of capitalisation and liquidity, edged down 0.24 per cent to 489.61 points. This was caused by the fall of 16 blue chips.

The declines of such large-cap shares as insurer Bao Viet Holdings (BVH), food processor Masan (MSN) and financial conglomerate Ocean Group (OGC) were a major threat to the market, said Hoa Binh Securities Co analyst Nguyen Thi Huong. MSN fell to its lowest level in six months. BVH is also hitting new lows.

Meanwhile, on the Ha Noi Stock Exchange, the HNX-Index lost steeply – more than one per cent – to close at 69.35 points.

Losers overwhelmed gainers by 145-69.

The value and volume of trades remained similar to Thursday's level at VND369.9 billion ($17.6 million) and 40.77 million shares.

The HNX30, composed of 30 top shares in Ha Noi, retreated nearly 1.5 per cent to reach 131.56 points.

VNDirect Securities Co (VND) was the most heavily traded stock with 5 million shares changing hands.

Foreign investors were net sellers on both exchanges. They sold a total of VND8 billion ($380,900) shares. — VNS

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