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VN-Index falls despite higher volumes
Share prices fell sharply on Nov. 20 on the Ho Chi Minh Stock Exchange, despite significantly improved liquidity.
The VN-Index tumbled 11.15 points, or 3.31 percent, to close at 325.74. Trading volume rose by 57 percent from a two-month low on Nov. 19 to 15.3 million shares, with a total revenue of 451.7 billion VND (27 million USD).
“As an exporter, we see great difficulties arising from the current world financial crisis,” said Vo Truong Thanh, chairman of the Truong Thanh Furniture Joint Stock Co (TTF). “Profits from the exports of many enterprises are likely to fall during the next year due to lowered consumer demand and increased competition.”
Shares of TTF fell by 1.2 percent to close at 16,400 VND in Nov. 20’s trading, on a volume of 6,430 shares traded.
The trading day witnessed 142 losers overall and only 17 gainers, with activity concentrated on some major stocks, with Sacombank (STB) seeing orders for 3.6 million shares, followed by Hoa Phat Group (HPG) at 807,000, and Saigon Securities Inc (SSI) at around 700,000.
Foreign investors on Nov. 20 accelerated buys, picking up 1.5 million shares, while maintaining sales at 1.4 million shares. Net sales value narrowed to 1 billion VND (60,000 USD) from Nov. 19’s 40 billion VND (2.38 million USD).
Le Hai Tra, a Ho Chi Minh Stock Exchange management board member, said that depressed prices on the domestic exchange would work to prevent foreigners from withdrawing capital too hastily. Perceived opportunities in an emerging economy would also prevent an investment outflow, he said.
Thanh said the loosening of credit and exchange rates was needed to solve firms’ difficulties. He suggested commercial banks offer lending interest rates of around 12 percent to help firms maintain “normal performance”.
Too late to influence trading, the Bank for Investment and Development of Vietnam (BIDV) on Nov. 20 announced a new preferential lending rate of 13 percent, following immediately on a State Bank of Vietnam move to cut the prime rate to 11 percent, effective today.
Ho Chi Minh Securities Co general director Johan Nyvene commented that “interest and exchange rates have been well controlled in recent months,” But, he said, more was needed to alleviate concerns about slowing economic growth.
The Government, he said, should stimulate demand through effective public investments, while companies should restructure resources, cut costs and focus on long-term development of core businesses.
In Hanoi on Nov. 20, the HASTC-Index also plunged 3.31 percent to end the day at 106.49, with 128 codes declining and 14 advancing. About 7.5 million shares changed hands for a turnover of 198.8 billion VND (11.8 million USD).
VNA
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