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Recovery runs out of steam on profit-taking
Share prices on the Ho Chi Minh Stock Exchange went on a rollercoaster ride Thursday as investors took profit after six days of gains.
Heavy selling in large caps, whose prices had moved up by 20-25 percent, in the first session pushed the VN-Index into negative territory. FPT Corp., which will go ex-dividend today, was among the stocks unloaded. The Hanoi-based software developer has a bonus issue today at a ratio of two for every one held.
But the country’s main stock index bounced back in the next session following surprisingly heavy buying by foreign investors, whichalso boosted domestic investor confidence.
The VN-Index eventually ended the day at 379.51 points for a minor gain of 0.44 percent. Trading volume was very high, with 30.3 million shares changing hands. Of the index’s 167 members, 37 gained and 113 lost.
Nguyen Duc Hung Linh, the Hanoi-based deputy head of analysis and investment at Saigon Securities Inc., said Barack Obama's victory in the US election Wednesday also cheered investors who saw it as a positive sign for the US market.
“However, I expect the market to fall tomorrow or early next week,” Linh said. “Many companies have been reporting losses. Borrowing costsare still high, so it is still not a very bright picture.”
Dong A Securities Co.’s Business Development Director Lawrence Wolfe said the Vietnam stock market’s price to earnings (P/E) ratio remains low, offering medium-term investors opportunity to buy shares of well-run companies at low prices. Dong A’s research department has predicted there is a 46.2 percent possibility that the VN-Index will end the year at 350-450 points and 15.4 percent possibility it will finish at 450.
It also says it is 15.3 percent likely to end below 300 points.
Foreign players were net buyers, pumping in VND83.4 billion (US$5 million).
Hoang Uy
Thanh Nien
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