Thursday, August 03, 2006

Market continues downward spiral

The prolonged slide of the Vietnamese bourse is continuing in early August, as domestic investors sell-off, in what market analysts are calling “herd effect”.

Vietnam’s stock market declined Tuesday, dropping 17.54 points to 404.87 as 42 of 45 corporate listed stocks fell, with domestic investors playing ‘follow the leader’, refusing to buck the market trend.

The value of many shares on the exchange had fallen by as much as 30 percent in the past two months and VN-Index has lost a heady 200 points since May.

However the stock trade volume and value rose around 25 percent at yesterday’s session over the previous day to 1.34 million shares and VND66.7 billion (US$4.2 million).
Blue chips recorded the highest volume due to concerted investor strategies, such as STB of Sacombank with 167,240 shares, REE of Refrigeration Electrical Engineering Corp., with 166,200 shares and VNM of Vinamilk with 161,900 shares.
The STB trading volume dropped a further 16.7 percent from the previous day but that of REE and VNM soared 151 percent and 75 percent respectively.
Other heavyweight trade stocks included Vinh Son-Song Hinh Hydropower Joint Stock Company (VSH) with 102,660 units, TYA Vietnam (TYA) with 63,630, Gemadept (GMD) with 63,170 and Samco (Sam) with 53,780.
These stocks make up two-thirds of the total trade volume and three-fourths of the value.
Banks have said that insufficient capital flows into securities was not the main reason for the market cool, as commercial banks continue to expand lending against stock collateral.
Lenders said the loans remained safe despite the volatility of the market over the past two months.
Vietnam International Bank (VIB) reported its current loans to the sector accounted for roughly 5 percent of the bank’s total loans.
Instead of lending only against bank stocks, VIB now offers loans against 29 different types of stocks ranging from shares in hydropower plants to insurance and information technology stocks.
The latest figures issued by commercial banks in May showed that 13 million shares worth VND751 billion ($47 million) on the market were used as collateral for loans.
Source: Vietnam Economic News


At 10:08 PM, Blogger Tran Tai said...

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