HA NOI — Shares suffered heavy losses for the third day this week, following the arrest of a banking tycoon earlier this week and speculation of more arrests to come.
|Investors watch stocks at the Habubank Securities Co's transaction floor. Stock indices continued to decline yesterday following tycoon's arrest. — VNA/VNS Photo Tran Viet
"Observing market movements, I see the panic is not limited to small investors alone," said individual investor Nguyen Anh Tuan. "Sell orders with a large amount of shares were also set."
On the HCM City Stock Exchange, the VN-Index moved down 4.24 per cent to 392.82 points. Nearly 90 per cent of the city's listed stocks lost value.
The value of trades reached only 68 per cent of the previous day's level, totalling VND679.5 billion (US$32.3 million) on a volume of 38.8 million shares.
The VN30, representing the southern bourse's top shares, also tumbled 4.4 per cent. The index reached 464.83 points, as all of the 30 shares failed to make gains, 28 of which closed yesterday at floor prices.
On the Ha Noi Stock Exchange, the HNX-Index fell 5.3 per cent, standing at just 61.23 per cent. Blue chips sent the HNX30 down 6.3 per cent to 114.04 points.
Around 34.9 million shares worth an overall value of VND322.1 billion ($15.3 million) changed hands.
Prior to Tuesday's session, when the market was rattled by the detention of a finance tycoon on fraud charges, the two benchmark indices had just overcome their resistance levels. Meanwhile, foreign investors were still active in buying, said VietCapital Securities Co analyst Nguyen The Minh.
On Tuesday, foreign investors were buyers by a margin of VND132 billion ($6.2 million), favouring such blue chips as Phu My Fertiliser (DPM), PetroVietnam Gas Co (Gas), Military Bank (MBB) and Vietcombank (VCB). The trend continued during the next day.
"Investors have got over panicking as they put sell pressure on almost all stocks," commented Military Bank Securities Co analyst Hoang Cong Tuan.
The current problem of the market, according to Tuan, was that investors did not know just what impact the arrest would have. "They are being misled by rumours," he added.
Facing this hefty fall, the State Securities Commission yesterday advised investors to calm down. "Investors should avoid being affected by unverified information from speculators who want to manipulate share prices," the commission said.
It recommended investors watch for official announcements from authorities, including the State Bank of Viet Nam, the commission and stock exchanges.
In addition, the commission is reinforcing the supervision of manipulation and raising penalties.
Meanwhile, Tuan predicted stocks would further decline during the next few sessions.
"Shares with a good foundation will soon recover, while bad performers will continue to face selling pressure," he said. — VNS