Tuesday, August 08, 2006

Stock market moves ahead after slump
(07-08-2006)

HCM CITY — Last week’s two final trading days saw a spectacular rise in the VN Index of almost 18 points per day, regaining momentum after days in decline.

The index tumbled almost 35 points last Monday and Tuesday, slowing the following day to a decline of just over five-points, coming to rest at 388.82 last Wednesday, the lowest level since it reached its historic height of 638.86 on April 25.

The result was a net decline of more than four points from the previous last Friday (July 28) as it closed at 435.5 at close last Friday.

Sacombank, the largest listed business played a significant role in the falls due to its various declines since its first trading day on July 12 when its price stood at VND78,000. It then strengthened to VND81,500 and since that peak, slid to only VND58,500 last Wednesday.

After five trading days, 20 out of 45 listed firms saw their value enhance while another 19 weakened and the remaining five stayed put.

The five were the canned food maker CAN, at VND24,000, construction stone DHA at VND56,000, the electric equipment and installation firm Full Power (FPC) at VND38,000, backpack Khahomex (KHA) at VND22,000 and trader Thien Nam (TNA) at VND42,000.
Of the gainers, the freight forwarding Vinafco (VFC) led the way, enjoying an 8.78 per cent rise, to VND28,500.

Agifish (AGF) was the hardest hit, falling 10.79 per cent, to VND62,000, while Sacombank (STB) sunk by 5.19 per cent to VND64,000.

Between July 31 and August 4, almost 18.8 milion securities were traded, valued at VND1.389 trillion. Bonds represented almost a half of the trading volume but 68 per cent of the total value. Shares accounted for over 46 per cent of the total securities and 31 per cent of the value, while certificates and the VF1 fund accounted for 4.6 per cent and 1.2 per cent respectively.

Sacombank topped in liquidity as more than 1.8 million shares were transferred and Vinamilk followed at a distance with a quantity of 742,000 stocks. TNA accounted for the smallest volume of over 5,000 units.

Foreign investors continued their buying in (excluding bonds), to capitalise on falling share prices. While they sold only 69,000 shares for around VND3.5 billion last week, they paid over VND61 billion to acquire 1 million shares and VF1 certificates with the later presenting only 4,200 units.

Their portfolio covered almost all shares on the board, but priority went to Sacombank, Sudico (SJS), REE, Gemadept,Vinh Son-Song Hinh (VSH) and Vinamilk.

In June foreign investors purchased more than 3 million shares and in July, over 8 million shares. They sold only around 1.1 million shares in the two months.

On the downward price, there were complaints from domestic investors on the sharp increase of the number of listed companies, causing share supply to outpace demand. However, Vu Thi Kim Lien, Vice Chairwoman of the State Securities Commission said its normal for her commission to issue licenses as the new companies meet all requirements to list.

Investors also said commercial banks tightening up on loans that use securities as collateral had a negative impact as it reduces the financial capacity of investors.

The Viet Nam Association for Financial Investors (VAFI) has called for a maximum widening of the room for foreign investors in a listed firm to 100 per cent, from the current 49 per cent, expecting the higher rate will attract more participation from foreign investors thus reducing the gap of supply and demand. — VNS

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