Sunday, December 4 2016

VietNamNews

Markets drop after long holiday despite substantial foreign buys

Update: May, 05/2015 - 08:50
Investors observe securities market moves. — VNA/VNS Photo Pham Hau
HA NOI  (VNS) — Shares plummeted in the first trading day after the week-long holiday break on the two exchanges yesterday, despite strong buys by the foreign sector.

On the HCM Stock Exchange, the VN-Index lost more than 17 points, or 3.08 per cent to close yesterday's session at 545.08 points.

Blue chips no longer gave the market its momentum as the VN30, which tracks the 30 stocks with the highest market value and liquidity, also erased nearly 17 points, or 2.8 per cent, to end the day at 576.52 points.

The red overwhelmed the electronic trading board with the number of declining stocks eight times higher than the number of advancing shares.

The foreign sector continued to collect shares in the two markets yesterday when picking another VND237 billion (US$11 million) worth of shares on both HCM City and Ha Noi's exchanges.

A positive part of yesterday's trading was an improvement in liquidity.

Low valuation attracted bargain investors, with market volume reaching 112.5 million shares worth VND1.774 trillion ($82.1 million), up 80 per cent in volume and 60 per cent in value compared with the preceding trading day.

However, according to Nguyen Huu Thinh, director of HCM Securities Co's Lang Ha branch, big money still sat out of the market, and only foreign investors and regular traders continued trading.

Thinh said that Circular 36, which limits banks' lending to stock investments to 5 per cent of their charter capital, reduced inflows from banks, an important capital source, into the equity market. Meanwhile, the IPO wave and divestments from State-owned enterprises' non-core businesses attracted huge money from institutional investors.

The market's sluggish development in the past two months depressed individual investors' sentiment, so a big proportion of their investments were channeled into the real estate market, which is picking up steam, Thinh said.

"Money inflows decreased sharply from the same period of last year, reflected in the low level of liquidity on average for the first four months of the year," he said.

On the Ha Noi Stock Exchange, the HNX-Index also dived 3.38 per cent to finish the session at 79.95 points, while the HNX30, tracking the top 30 shares by liquidity, dropped 4.28 per cent to close at 150.5 points.

The market conditions were also very negative here, as the losers overwhelmed the gainers by 187-32 while the other 147 remained steady.

Liquidity improved, with the market volume increasing 50 per cent over the previous session to reach 59.2 million shares worth VND646 billion ($29.9 million), up 40 per cent compared with last Monday's value.

According to Le Duc Khanh, director of the strategy division at Maritime Bank Securities Co, the market was entering a downtrend and after a slight recovery, it would likely decline toward the end of May.

"Only when the stock prices are cheap enough will new money come back," he said. — VNS


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