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Stock market: cash flowing to Hanoi trading floor
The trading volume at the Hanoi Trading Securities Centre (HASTC) has seen sharp increases since mid September. It seems that the smart cash is flowing into the place which can bring the biggest profit. Investors are flocking to HASTC instead of the Ho Chi Minh City Stock Exchange (HOSE), which is considered the main bourse in Vietnam.
In the eyes of securities investors, HASTC is considered less profitable than HOSE. It is partially because they think that HASTC gathers companies which cannot meet the requirements for listing at HOSE.
Therefore, it is quite a nice surprise to see that the HASTC Index has soared from 261 points on September 17 to 379.58 points in early October, a 45% increase. Meanwhile, the increase was 18% only at HOSE during the same time.
Statistics show the signs of the investment capital transfer: HASTC’s trading volume has risen from the average level of 1mil units between April and September to 5mil units per trading session.
Analysts say that the figure is even higher than the ‘golden time’ of HASTC seen in February and March 2007, when the trading volume was 3mil units at maximum. More and more investors have shifted to make transactions at HASTC, which can be seen in the increased number of successful transactions.
In fact, investors once feared that SSI’s leaving for HOSE would cause falls in trading volume at HASTC. However, contrary to all predictions, the average trading volume in the first two trading sessions of the week was still 6.45mil units, an increase of 20% over the average level seen in the previous 10 trading sessions.
Why are investors flocking to HASTC? The Hanoi trading floor has shown its special attractiveness, especially as investors cannot gain fat profit at HOSE any more. Blue chips at HOSE are ‘exhausted’, and new stocks are not available due to irregular sales.
Analysts have also cited another important reason why investors have been able to earn the maximum profit of 10% per trading session: the wider trading band applied at HASTC compared to HOSE (10% vs 5%).
Nguyen Vu Quang Trung, Deputy Director of HASTC, said that there were five reasons behind the HASTC Index increase and the higher number of investors. He said that Vietnam’s stock market, both the HCM City and Hanoi floors, were now seeing upward trends. The national economy has been performing well, and listing companies all have reported satisfactory business results. Meanwhile, investors may be finding it necessary to restructure their investment portfolios.
Mr Trung also mentioned that HASTC had signed a memorandum of understanding with other stock exchanges, including New York Stock Exchange, calling this good news that has helped attract more investors.
Manh Hai, an investor at VIB Bank’s Securities Company, who has injected all his money in HASTC’s securities items for the last two years, said that he liked HASTC’s shares because of their transparency. “There have been no signs of fraud, with groups of investors working together to force prices up or down,” he said, adding that the listing companies all had good business results and strictly followed regulations on financial disclosure.
Mr Hai said that the HASTC Index would increase further in the time to come, possibly to hit the 400 point threshold.
Mr Trung from HASTC said that HASTC had received 20 applications for listing at HASTC from now to the end of this year.
Some analysts have warned that there are latent risks in the sharp increases of share prices at HASTC, and that it would be better if the HASTC index rose more slowly.
TP
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