Market stalls, as Index nears 500

Monday, May 12, 2008
Market stalls, as Index nears 500In last week's trading, the HCM City Stock Market showed some signs of life in the first two days of the week, particularly in strong investor purchases of healthcare and consumer goods stocks.

This small enthusiasm, however, was unable to sustain the market through the remainder of the week, as trading volumes and values trailed off and, in the final two sessions of the week, most shares plunged to their floor prices, with damage limited only by the tight, two-per-cent daily trading band.

By Friday, the scene around most stock brokerages came to resemble a death watch, as investors largely stopped trading and waited to see whether the Index would fall below the psychological barrier of 500 points.

The VN-Index ended the week at 500.33, a loss of 20.95 points or 4.01%.

Volume was a sluggish 29.2mil shares for the whole week, with a total market turnover of VND1.24tril (US$77.75mil).

FPT Securities Co's analysis department opined that untimely information during the week cooled what little investor interest there had been, including Standard & Poor's adjustment of Vietnam's credit rating from stable to negative and the Central Institute of Economic Management's prediction that inflation for the year would total 19.4%.

World oil prices also hit a new record of US$126 a barrel, causing regional stock markets to wilt, and the Vietnamese market was no exception.

"Domestic investors are still too green to stay calm when bombarded with bad news," said one analyst. "That's why they act unpredictably as they did this week."

While over 90% of listed codes on the HCM City Stock Exchange suffered losses, PetroVietnam Drilling (PVD) was a big loser, dropping 22.2% to VND91,000, as the exdate for its dividend payout passed.

FPT also lost 9.26% to end the week at VND73,500, while Tuong An Vegetable Oil (TAC) slipped 8.84% to VND103,000.

Only 13 codes posted gains on the week, including Vinpearl Tourism and Trading (VPL), which advanced 5.12% to VND123,000, and Tan Tao Industrial Park (ITA), up 6.99% to VND76,500. Both were buoyed by strong foreign investor interest.

Sacombank (STB) regained its spot as most-active share on Friday, after announcing strong first-quarter business results.

As the trading week ground to a close on Friday, a few investors expressed hopes that a VN-Index falling to 500 would signal a rally in the coming week, as it has in the past.

In the northern market, the HASTC-Index also lost 7.67% to end the week at 154.23. Trading turnover was VND276.23bil ($17.26mil) on a volume of 7.19mil shares.

Asia Commercial Bank (ACB) was the most-active share, with 731,100 shares changing hands. (Viet Nam News)