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SCIC: Investors need to play fair
The government is doing what it needs to do to rescue the stock market by allowing the State Capital Investment Corporation (SCIC) to purchase shares. It is now investors’ turn to take action by joining forces with the government to rescue the market by buying shares and making long-term investments.
On March 11, the stock market fell again after three successive prosperous trading sessions. Investors got angry when they saw share prices drop again, and they have expressed doubts about the efficiency of the SCIC’s share purchases in an effort to rescue the stock market.
“SCIC did not buy shares as it promised. SCIC must know that it is a very sensitive moment for the market. The rally of stock prices, though very slight, will help restore investors’ confidence,” an investor said, adding that it seems that SCIC is not aware of the ‘universal truth’.
SCIC, not state management agencies, has become the target of public criticism. An investor said that he thought that SCIC either wants the stock market to fall continuously so that it can buy shares at low prices to seek profit or it never intended to buy shares as it stated.
“I really have lost confidence in SCIC. It is not worth our belief that the stock market will be rescued when SCIC purchases stocks,” he said.
Meanwhile, SCIC Deputy General Director Le Song Lai said he regrets that SCIC’s efforts have not been recognised by investors.
“In fact, SCIC began purchasing stocks to implement the plan to rescue the stock market on March 7 and it has continued buying stocks in subsequent trading sessions. SCIC is trying its best to rescue the market,” Lai stated.
SCIC’s moves have helped restore the public’s confidence, which has led to the recovery of the stock market in the last few trading sessions. However, just one falling trading session is enough to make investors complain.
“I cannot understand what investors expect from SCIC,” Lai said.
The fact that the stock market unexpectedly fell on March 11 after three days of recovery, according to Lai, showed that investors make investment decisions by feeling, and just follow each other in buying or selling shares, while they do not really thoroughly analyse the market.
Lai said that nearly all investors just want to make short-term investments. They buy shares at low prices and sell shares right when the prices increase a little to make profit.
In which case, no financial institution has enough power to stabilise the market for long.
People may think that the government, under pressure from investors, forced SCIC to intervene in the market to rescue it from drowning. Similarly, prior to that, the Ministry of Finance had to delay the collection of personal income tax after investors threatened to quit the market if they had to pay tax.
However, Lai said that the government’s actions to rescue the market, including SCIC’s share purchases, should not be seen as a thing the government must do. The fact that SCIC now purchases shares does not mean that it must buy shares every time the market falls.
“SCIC purchases shares not because of pressure from any investor or institution,” Lai stated, adding that investors should ‘play fair’.
According to Lai, the market goes up and down, and investors may make profit or suffer loss. When the stock market went up, investors pocketed big money, which they spent on luxury houses and cars. No investor thought that they needed to pay taxes to the state. When the stock market fell down, investors put pressure on the government, requesting intervention to heat the market up.
The government and some organisations have been doing necessary things to rescue the stock market. The government has asked SCIC to purchase shares as a big financial institution. Securities companies have halted selling shares as investors. Foreign investors have been pushing up share purchases. JP Morgan said it has reserved $1bil for making investments in Vietnam. Meanwhile, the only thing domestic investors do is rush to sell shares right when stock prices increase a little.
“The government has performed its duty by buying shares to stimulate market demand, and it is now the turn of investors to take action by halting share sales, buying more shares and making long-term instead of short-term investments.”
Lai affirmed that SCIT will continue purchasing shares as the government’s strategic investor with long-term investment plan. SCIC, unlike other investors, will not buy shares when prices go down, and sell when prices go up. SCIC will purchase shares, but not regularly, and investors should not expect that SCIC will spend several hundred billion VND to buy shares every trading session.
“SCIC will consider many factors, not only share prices, to decide whether to buy shares, which share items to buy and when to buy.”
VNN
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