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Stock market ends volatile week with fall
The Ho Chi Minh City stock market edged down Friday as investors sold off shares to bail out of the marketplace, a broker said.
The VN-Index staged an 8.11-point, or 1.76 percent, fall to close at 452.14.
Trading volume was above 12 million shares. Of the index’s members, 90 declined and 49 advanced.
“Investors remained distinctly cautious over how much the US$700 billion package [by the U.S. government] will help the ailing banking system,” a chief broker at a HCMC brokerage, who had predicted the market would rise slightly Friday, said. “They sold off shares to withdraw from the market and are awaiting more certainty.”
He also said investors’ confidence has been hit by the Asian and European markets. Stock markets fell Friday in Asia and Europe after heavy overnight Wall Street losses, ahead of another vital vote by US lawmakers on a multi-billion-dollar rescue for the financial sector.
The House of Representatives in Washington was set to vote on a revised plan to spend US$700 billion on a rescue package that the government hopes will ease pressure on the economy.
“The Asian market is very sensitive to the US subprime crisis,” said Ken Tai, technical analyst for Singapore and Vietnam at Kim Eng Securities in Singapore.
“It hit the market badly. But for the Vietnamese market, it was not much of a difference. Vietnam will perhaps still outperform other parts of Asia.”
Tai also said the daily trading band, which is set at 5 percent, should be widened up to 10 percent. “It seems like liquidity is still a concern for the authorities to widen the limit range,” he said.
“Vietnam's stock market will advance in the long term because of a stable political system, increasing interest from foreign investors, rising income and consumption, and the government's firm commitment to turn state-owned companies into joint-stock companies by selling shares,” said Nguyen Duc Hung Linh, the Hanoi-based deputy head of analysis and investment at Saigon Securities Inc.
Linh added the brokerage has selected 30 companies to form SSI's benchmark index. “These companies have strong fundamentals,” he said. “They have gone through the difficult economic conditions in the last few months and they are still growing.
“Our analysis shows that these companies, whose market value makes up more than 60 percent of Vietnam's stock markets, will have a revenue increase of 30 percent this year, and net profit increase of 11 percent, from last year, led by basic materials businesses – like PetroVietnam Fertilizer & Chemical Joint-Stock Co. and Hoa Phat Group – oil and gas companies, and consumer goods companies – like Vietnam Dairy Products Joint-Stock Co.
“Next year, these companies' revenue will grow by about 17 percent, and net profit by 13 percent, from this year, because of the impact of the economic difficulties this year, a decline in demand and the government's intention to keep tightening credit lending.
“We are visiting the companies to inspect their facilities and waiting for the companies' third-quarter financial reports to assess the performance of their stocks more precisely.”
Foreigners remained net sellers, notching up sales of VND23 billion ($1.4 million). Telecom material supplier Sacom (SAM), dairy maker Vinamilk (VNM), PetroVietnam Fertilizer and Chemical Joint Stock Co. (DPM), PV Drilling (PVD) and resort operator Vinpearl (VPL) were among the stocks they sold the most.
Thanhnien
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