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Market yawns at Vietcombank IPO news

Update: December, 09/2007 - 00:00

Market yawns at Vietcombank IPO news

(10-12-2007)

Investors watch trading boards at Saigon Securities Inc. Individual investors took a wait-and-see attitude last week, leaving the market in the doldrums. — VNS Photo Truong Vi

HA NOI — The stock market reacted impassively to widespread publicity last week about Vietcombank’s upcoming initial public offering, with the VN-Index gaining only 2.28 points on the week.

Trading was somewhat more upbeat on Monday of last week, said analysts, but the mood didn’t last long. Other factors continued to weigh on the market, they said.

Before information of the Vietcombank IPO was released, many had predicted that bank shares would be affected. However, Sacombank (STB) shares only rose on Monday when information of Vietcombank’s initial share price was released preliminarily by the HCM City Stock Exchange.

STB reached VND70,000 on Monday, but closed out the week at VND68,500, equal to the previous week’s close.

Vo Ngoc Huy, deputy director of the brokerage department of the Sacombank Securities Co, said, "Investors now want to hold onto their shares rather than selling as they want to enjoy the benefits that many companies are expected to offer at the end of the year, such as dividends, bonus shares and options to buy additional shares at preferential prices."

The IPO, therefore, could not set the market trend, and has become only a factor in making the investor mood more upbeat, Huy said.

Huy Nam, a freelance expert in HCM City, said, "Vietcombank’s IPO is a move affirming the State’s determination to restructure State-owned enterprises, it doesn’t relate directly to individual investor actions."

Sure enough, in most trading sessions, investors seemed to take a wait-and-see attitutde, putting off any major buy or sell decisions, with both trading volume and value declining as a result.

Average volume per day last week was 7.97 million shares, down from the previous week’s 8.3 million, with an average value of VND798.3 billion (US$50 million) per day, compared to the previous week’s VND859.2 billion ($53.7 million).

"It is difficult to predict the VN-Index for the week ahead because there are no clear signs," Nam said. "The prices of many shares are now reasonable to buy in, but the problem is whether investors want to buy. It will be hard for the market overall to repeat its skyrocketing performance at the end of last year. This year, a 1,000-point level is as good as can be expected."

In last week’s trading, Phuong Nam Culture Joint Stock Co (PNC) was the leading gainer, advancing 17.35 per cent for the week to close on Friday at VND39,900. Long An Food Processing and Export (LAF) closed at VND54,500, 9 per cent higher than the previous Friday.

Binh Trieu Construction and Engineering (BTC) was the week’s top loser, declining 16.37 per cent to close at VND71,500.

At the Ha Noi Securities Trading Centre, the HaSTC-Index closed the week at 344.08 points, a gain of 2.98 points. — VNS

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