Viet Nam News
HÀ NỘI — Investors should not panic about the continuous fall of the stock market in recent times, said leaders of Saigon Securities (SSI).
SSI Vice Chairman Phạm Hồng Sơn told Việt Nam Television (VTV) that there were reasons behind the sharp drop of the market in recent trading sessions.
On Monday, the benchmark VN Index on HCM Stock Exchange dropped by 3.34 per cent, or more than 32 points, to close at 931.75 points, hitting its lowest level since December 15, 2017.
The minor HNX Index on Hà Nội Stock Exchange tumbled by 6.21 per cent on Monday, or 7.11 points, to end at 107.37 points, totalling a three-day decline of 9.1 per cent.
Profit-taking pressure among investors also dragged the market down.
However, shares had witnessed a strong growth from 2017 to the first quarter of 2018. Therefore, a correction period is most likely afterwards.
Sơn, meanwhile, said the large supply of stocks on the market also affected the performance of the indexes, adding that the market needs time to absorb.
Referring to external factors, he said the US-China trade tension and global geopolitics also affected investor sentiment.
However, he advised investors to calm down and invest in securities for a long-term value.
“The market has seen up-and-down trading, but there is still balance, thanks to macroeconomic stability and positive monetary policies. Businesses are operating effectively because more than 90 per cent of listed firms on both the exchanges have good growth,” Sơn said.
Moreover, the Government has ordered drastic equitisation and restructuring of State-owned enterprises (SOEs).
Nguyễn Vũ Quang Trung, deputy director general of Hà Nội Stock Exchange, said the recent fall of the market was not expected by either investors or market regulators.
However, there were positive signals in the session on Monday. The deepening rhythm, for example, has shifted to small- and mid-cap stocks.
Previously, when the market increased, large-cap stocks would gain first, and the uptrend would move to the mid-cap group, Trung said, adding that the market was showing signs of returning to a stable uptrend soon.
He said although the market drivers and banking stocks were expected to remain bearish, other pillar stocks in the real estate sector have been rising.
SSI president Nguyễn Duy Hưng said the market had continuously increased from 900 to 1,200 points in a short time due to the good performance of large-cap stocks. These shares were issued to absorb capital from the market.
When the cash flow could not respond timely, the stocks reversed. Large-cap stocks thus dragged the VN Index down and this worried investors, making them keep a close watch on market fluctuations and adopt a wait-and-watch approach with little capital injection.
According to Hưng, foreign investors are still interested in Việt Nam’s stock market. He said the issuance of large-cap stocks forced foreign investors to balance their portfolio by selling some stocks to buy others. — VNS