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Market in bear crush, trading volume tumbles
Investors’ sentiment in Ho Chi Minh City remains on the edge with the market having dropped five days in a row, resulting in heavy sell offs Friday.
Stocks dipped into the red soon after the opening bell and followed that trajectory until closing time.
The VN-Index of 158 leading companies and four closed-end funds slumped 21.01 points, or 4.23 percent to close at 476.
Investors unloaded shares as few were willing to buy.
Trading volume was only 15 million shares, half the number of transactions on previous days of the week.
Of the index’s members, 152 fell with 131 losing the daily maximum of 5 percent and a mere three remained unchanged.
“Vietnamese equities have become fundamentally expensive in this bearish market,” Bloomberg quoted Adrian Cundy, head of research for Joint-Stock Co. in HCMC, as saying.
“At 15 times trailing earnings, Vietnam is no longer a bargain market. The correction has been overdue for sometime. It doesn’t surprise me that the market is going to fall.”
“The market outlook for earnings is flat for 2008 and negative on dilution of earnings per share.
While inflation pressure has receded, the need to maintain vigilance remains.
Interest rates are unlikely to be materially adjusted by the central bank this year.
“The market’s momentum has turned negative, with institutional investors becoming net sellers over the last month.
Retail investors have chased momentum stocks to stratospheric levels and now that the momentum has shifted, several securities will see significant declines as optimistic sentiment evaporates.
“It is very difficult to predict week-by-week movement, but the market is overvalued and should cool down a bit. I am looking at another 10-15 percent drop from here. Fair value of the stock market should be below 450.’’
Foreign investors remained net sellers, notching VND9 billion (US$545,950) via sold shares.
Steel maker Hoa Phat Group, PetroVietnam Fertilizer and Chemical Joint Stock Company, food maker Nam Viet, oil drilling firm PV Drilling and Vinh Son Hydropower were among the most widely sold stocks.
The Hanoi Securities Trading Center also suffered a steep fall, with the HaSTC-Index dropping 8.67 points, or 5.12 percent to close at 160.62.
Thanhnien
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