|
Herd mentality results in market fluctuation
Some experts have said that crowd psychology is governing the domestic stock market, and the situation yesterday suggests they’re right.
The number of day traders is overwhelming the number of long-term investors, Nguyen Van Thuan, director of HCM City Open University’s Faculty of Accounting, Finance and Banking, said at a stock market seminar in HCM City last Wednesday.
"As in other emerging markets, sometimes herd mentality determines market trends," said Thuan. "Recent share prices have surpassed many experts’ expectations," he said referring to the rise in prices and activity.
But investor excitement may also cause negative fluctuation on the market, he noted.
He may be right. Yesterday, huge sales far exceeded purchases in the HCM City Stock Exchange causing the VN-Index to slump 12.23 points or 2.53 per cent to close at 470.82.
This came in the wake of Friday’s slump, during which investors cashed in on expected profits after nearly a month of increases, pulling the index down 1.38 per cent to 483.05.
Trading volume fell to 16.1 million shares, and fund certificate revenue totalled VND746 billion (US$45.2 million).
Almost all codes hit the floor, including major stocks such as Phu My Fertilisers (DPM), FPT, Hoa Phat Group (HPG), Tan Tao Industrial Park Corp (ITA), Sacombank (STB) and Vinamilk (VNM).
However, Saigon Securities Inc (SSI) bucked the trend. Big purchases for the share brought it alone to a remarkable high, and it was also the most actively traded stock with around 7 million shares changing hands for VND342.75 billion ($20.77 million).
Bong Bach Tuyet Corp (BBT) resumed trading on the HCM City Stock Exchange yesterday after six days of suspension due to two years of losses. Investors were expecting no transactions, but orders were matched for 2,350 BBT shares.
Overseas clients were active, buying about 10 million shares and fund certificates and selling 2.74 million units.
The northern market experienced similar trends with abundant sales and barely any purchases weighing the HASTC-Index down 1.4 points or 0.94 per cent to 148.28.
Trading volume was three times smaller than last Friday’s figure, reaching 5.28 million shares, for a turnover of VND239.8 billion ($14.5 million).
Asia Commercial Bank (ACB) and Petroleum Technical Services Corp (PVS), which were the most active shares over the past few weeks, hit the floor.
Tran Hoai Phuong, general director of Gia Quyen Securities, stressed the importance of improving the investment environment at the macro-level. "Economic developments determine company growth," he said. The Ministry of Finance yesterday raised the price of domestic petrol by 30 per cent to VND19,000 ($1.15) per litre in a move to cope with world oil price hikes, which raised fears among investors about future market difficulties.
Crude prices edged up yesterday but remained below $130 a barrel.
VNS
|
