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VN-Index slumps to year low on global woes
Continuing worries about the global financial crisis saw a sell-off in Ho Chi Minh City stocks Thursday, sending them crashing to their lowest level this year.
The VN-Index, Vietnam’s main stock index, closed 14.48 points, or 3.86 percent, down at 360.43. The index, a gauge of 160 companies and four closed-end funds, had reached its previous lowest of 366 points in June. It has plunged 61 percent this year.
Signs of the sell-off became apparent at the opening bell and the selling pressure never let up until the close, during which time 147 stocks declined, 126 by the daily maximum limit of 5 percent. Trading volume was 13.5 million shares.
“Foreigners, who panicked at the steep falls in international markets, dumped shares of large caps,” Nguyen Hai Son, a broker at FPT Securities Corp., said. “Domestic investors, who are braced for further falls, did not buy.”
Hoang Thach Lan, chief analyst at HCMC-based SME Securities, told Thanh Nien Daily that the technical charts show that Thursday’s slump is a sign of dramatic weakness in the market.
Foreign investors have been selling since early this month, notching up a total negative figure of VND85 billion (US$5 million). PetroVietnam Fertilizer and Chemical Joint Stock Co., dairy maker Vinamilk, industrial zone operator Tan Tao, Pha Lai Thermal Power and oil drilling PV Drilling were among the stocks they sold Thursday.
Saigon Thuong Tin Commercial Joint Stock Bank, the exchange’s only listed lender, was the most active stock by volume, with nearly 2 million shares being traded. Sacombank, as it is known, lost VND1,100, or 5 percent, to close at VND20,900.
Industrial zone operator Tan Tao was the best performer, gaining VND1,600, or 4.95 percent, to finish at
VND33,900. General deputy director Nguyen Thi Suong registered to buy one million shares to raise her stake from 690 shares to 1,000,690 before December 31, according to a report on the exchange’s website Thursday.
Asia stocks at four-year low as global economy slows
Asian stocks fell to a four-year low Thursday on growing fears emerging market weakness will prolong a global recession and depress corporate earnings, pushing the yen to a six-year high against the euro.
European stock futures were down slightly, helped by a rise in US stock futures.
Investors have mostly sought refuge in government debt of the euro zone, Japan and the US as well as the yen, after credit market stabilization in the last week unearthed a renewed focus on the adverse impact of the financial crisis on real economies, especially in emerging markets.
The cost of insurance against sovereign debt default in countries such as South Korea, Indonesia and the Philippines soared, with a sense of panic festering two days after Argentina moved to nationalize its pension system. The step was interpreted by investors as a desperate measure to stave off default.
Markets in developing countries, especially those that depend on portfolio (or securities market investments) flows to balance their current accounts, were abandoned overnight, with almost no one spared from a sharp slowdown in the global economy that has pushed crude prices below $70 a barrel and dragged copper prices to a three-year low.
The outlook for export-dependent Asian economies darkened, hitting the shares of many high-profile companies that have staked their business on overseas sales, such as Samsung Electronics and Canon Inc.
“Even after a series of concerted efforts by governments to stabilize the financial markets, it seems that the global economy is still under pressure and will likely slip into a recession,” said Daniel Chan, senior investment strategist at DBS Bank in Hong Kong.
The MSCI index of Asia-Pacific stocks outside Japan fell 5.5 percent to its lowest since October 2004.
The global emerging markets index was down 3.7 percent to a near four-year low, and its 35 percent drop so far in October has outpaced the 25 percent decline on the all-country world index.
Japan’s Nikkei share average fell 2.5 percent, though it was down as much as 7 percent earlier in the session. The index cut losses as US stock futures extended gains following a story in the Wall Street Journal saying the government will consider a $40 billion plan to slow home foreclosures.
South Korea’s KOSPI index fell 7.4 percent, led by shares of Samsung Electronics and steel producer POSCO.
Hong Kong’s Hang Seng index was down 4.7 percent at the lowest level since April 2005.
Some property stocks managed to gain after the Chinese government late on Wednesday announced policies to increase homeownership. China Overseas Land’s stock rose 2.1 percent, despite a 6.8 percent drop in mainland Chinese stocks listed in Hong Kong.
“Thursday’s move can be considered part of an overall effort to give a light stimulus to the economy, but in my view is primarily focused on the real estate sector. These changes also illustrate that the Party is capable of taking proactive steps to deal with a changing economic environment,” said Andy Rothman, China macro strategist with CLSA in Shanghai.
“A good time to look at residential developer stocks,” he said in a report.
Thanhnien
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