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Market slumps on gloomy outlook
The VN-Index dropped for four consecutive days last week, as investor worries deepened about increasingly gloomy economic conditions and the business prospects for listed companies.
Recent government efforts to help firms and investors survive the hard times, including a cut in diesel fuel prices, a delay in implementation of the new income tax law and subsidised-interest loan programme for enterprises, were met with general indifference on the stock market.
The VN-Index lost 7.12 points overall to end the week at 274.51, a 2.52-per-cent drop from the previous Friday's close.
Activity remained sluggish, as trading volume averaged just 6.55 million shares per day, off 0.6 per cent from the previous week's average. Daily trading value reached about VND126.9 billion (US$7.5 million), a fall of 11.5 per cent.
Foreign investor transactions were modest, with about 10 million shares changing hands on the week. Foreigners were net sellers of 1.6 million shares, with a net value of nearly VND30 billion ($1.76 million).
Shares in the tourism and entertainment sector declined the most last week, dropping 5.14 per cent, according to FPT Securities data. This was followed by industrial goods and services, down 4.19 per cent, and food and beverages, down 4.03 per cent.
Resources shares bucked the trend, gaining 4.53 per cent, alongside shares of automotive and spare parts, up a scant 0.72 per cent.
"Trading has become gloomy in recent sessions, demonstrating investor hesitation in the face of mixed signals about domestic economic prospects," VNDirect Securities Co said in a report on Friday.
Listed firms continued to publish poor business results last week, discouraging investors, said FPT Securities analyst Nguyen The Dinh. Investor sentiment was significantly affected by some firms being put under observation, including blue chip Refrigeration Electrical Engineering Corp (REE).
"Investors are still very cautious and hesitant," said VNDirect Securities analyst Le Tuan Anh, adding that activity was concentrated on a few blue chips. "Investors are in a waiting mindset in the face of mixed market developments and speculation based on little good news in the horizon. The market therefore will hold steady with a tendency to gradually decline."
Dinh noted that shares of many firms that had good performance were now very attractively priced, and there were new long-term investors joining the market. He expected the VN-Index to range between 260 and 282 points this week.
In Ha Noi last week, the HASTC-Index closed at 90.94 points after sliding 1.85 per cent during the week. About 3.15 million shares changed hands per day, on a daily turnover of about VND64.5 billion ($3.8 million).
The index was expected to range between 84 and 93 points this week, Dinh said.
VietNamNet, Viet Nam News
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