Minister pep talks investors

Thursday, May 22, 2008
Minister of Finance Vu Van Ninh tried to speak some encouraging words to stock market investors yesterday, noting that the prolonged decline of many shares, in combination with the strong business performance of many listed enterprises, had resulted in highly advantageous price-per-earnings (P/E) ratios for many shares .

The P/E ratios suggested that investors could buy with confidence that their investments would bear fruit over time, Ninh said.

But Nguyen Thanh Nam, an investor and information technology professional, said, "The constant shedding of the index has left me feeling ill-at-ease, and I have decided to withdraw money from stocks to pour into commercial banks now that deposit interest rates are higher, at 12 per cent or more."

With most domestic stock traders apparently feeling much the same way, the VN-Index continued its slide yesterday for the thirteenth straight trading day, losing another 7.49 points, or 1.67 per cent, to close at 441.75.

In its current rout, the Index has lost a total of 80.61 points, or 15.52 per cent of its value.

Volume in yesterday’s trading was 4.85 million shares, worth VND212.8 billion (US$13.3 million). Foreign investors were net buyers of over 2.5 million of those shares.

There were only two gainers on the day, while another 140 codes hit their floor prices.

Ninh continued to assert that the difficulties were temporary and the Government was trying its best to stabilise and encourage the recovery and development of the stock market.

"Domestic investors who have bartered away a mass of shares will now have greater influence on the stock market," Ninh predicted.

He reminded investors that, although curbing inflation was the top official priority currently due to its strong influence on the economy and society as a whole, the stock market would continue to play a vital role in the development of the economy.

In Ha Noi yesterday, the HASTC-Index closed down 2.46 points, or 1.82 per cent, to 132.75, its fourteenth consecutive day of losses, during which period the index has lost a whopping 25 per cent of its value.

Trading volume also saw a decline of 18 per cent yesterday, with only a measly 933,940 shares changing hands, for a total value of VND31.7 billion ($1.98 million).

Asia Commercial Bank was the most-active share on the Ha Noi bourse yesterday, at over 200,000 traded, but still closed at its floor price of VND57,500.

Foreign investors were net buyers, but of only 63,000 shares, a drop of 71 per cent from foreign investor activity on Tuesday.

PetroVietnam Insurance (PVI) still manage to lure foreign investors, but at a volume about one-fifth of Tuesday’s.