Tight band slows trades to a trickle

(03-04-2008)
A couple of investors have the board to themselves at the offices of ACB Securities office in Ha Noi. — VNS Photo Viet Thanh

HA NOI — The VN-Index continued inching up yesterday within the confines of the narrower daily trading band instituted a week ago, gaining 0.79 per cent in yesterday’s session to close at 525.11.

Trading, meanwhile, seemed to be slowing to a trickle under the new market restriction, with turnover in yesterday’s session reaching only VND72 billion (US$4.5 million) on a very meagre volume of only 1.1 million shares.

"Buy orders are outnumbering sell orders, but the sellers just are there," said Hoang Quoc Dung, an investor with Viet Nam International Securities.

According to Bui Van Quang, deputy director of SME Securities, investors were holding onto shares because they didn’t see much profit in trading within the narrow band.

"Accordingly, boredom with trading could become a habit if authorities still continue with the tighter band," Quang said.

Despite fears of the stock market becoming frozen, Ta Thanh Binh, deputy head of market development under State Securities Commission, said, "We will continue the narrow band as we see investors are not yet calm. Once the stock market signals some strength, we will loosen the band."

Foreigners were net sellers yesterday, with 308,790 shares bought and 342,450 shares sold.

"Due to the panic of local investors and the gloomy state of the stock market, these minor shifts in buying and selling by foreign traders creates rumours that foreigners are withdrawing from the stock exchange," said Binh.

"That’s not going to happen."

Rang Dong Light and Vacuum Tube (RAL) was the only decliner in yesterday’s session due to passage of the exdate for its dividend payment. RAL closed down 1.22 per cent to VND40,400.

Viet Nam - Italy Steel (VIS) led the market in trading volume, on only 107,400 shares.

In Ha Noi yesterday, the HASTC-Index closed up 1.78 per cent to 187.69. Trading revenue reached only VND23.45 billion ($1.4 million) on a tiny volume of 433,500 shares. — VNS