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Index nears four-year lows on poor business results
The VN-Index yesterday shed another 2.06 per cent of its value to hit a new three-and-half-year low of 276.22, as investor concerns deepened about the prospects of listed firms.
Trading volume on the HCM City Stock Exchange increased 19 per cent over Tuesday's session to 7 million shares on a turnover of VND141 billion (US$8.3 million).
Pha Lai Thermal Power (PPC) was the most active share, with 1.34 million shares traded, followed by Sacombank (STB) at 579,000 shares.
Foreign investors were a little busier yesterday, responsible for nearly 3.2 million trades before ending the day as net sellers to the tune of 152,000 shares, with a net value of VND2 billion ($118,000).
Listed firms continued to release poor 2008 business results, casting a pall over investor sentiment, said FPT Securities analysts.
"The first quarter of 2009 will remain a difficult time for company profits," said the investment director of VNDirect Securities, Tran Dinh Phong, who noted that falling consumer spending during the economic downturn was a major factor affecting business performance.
The director of the stock exchange's department of listing evaluation and administration, Tran Dao Anh, also indicated that an increasing number of firms were likely to be put under observation due to their losses, with four listed companies put under observation early this week and investor alerts issued on others, further dragging down the market on Tuesday.
Government efforts to ease firms' difficulties, including a subsidised-interest loan programme and a cut in diesel prices, have been to no avail in reviving the flagging market.
"Investors shouldn't panic, but they need to carefully ascertain the reasons why companies have suffered losses and assess their ability to recover," said Anh. "The losses of Refrigeration Electrical Engineering Corp (REE), for example, are mainly due to bad financial investments, and its core business is still good."
"Early February trading sessions are creating great opportunities for long-term investors," said FPT Securities analyst Tran Quang Vinh. He suggested that shares in the mining, cement and electricity sectors - which have felt few impacts from economic conditions - were good choices for investors now.
In Ha Noi yesterday, the HASTC-Index also dropped another 1.85 per cent to end the trading day at a mere 91.3. Trading volume was 3.1 million shares worth VND66.2 billion ($3.9 million). Activities on the northern market remained sluggish, concentrated on Asia Commercial Bank (ACB) with 397,000 shares changing hands, and Kim Long Securities (KLS) with 396,000.
VietNamNet, Viet Nam News
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