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Investors shun illiquid small caps despite solid results
Despite good first quarter results, small-cap stocks are not attractive since a majority of investors engage in day trading and find it easier to trade blue chips.
Khanh Hoi Import Export Joint-Stock Co. (KHA), based in Ho Chi Minh City, posted a profit of VND7.9 billion (US$444,190) in the first quarter, 188 percent higher year on year despite the economic slowdown.
But at the end of April, the stock was traded at VND12,000-14,000 on the Ho Chi Minh Stock Exchange, not much higher than its April 1 price of VND12,200.
Hanoi-based Dien Hong Printing Joint-Stock Company (DHI)’s first quarter results were even more impressive, rising more than four times year on year to VND223 million.
But DHI made minor gains on the Hanoi Securities Trading Center last month, closing at VND9,700 on April 29, up just VND1,100 from April 1.
Many other small-cap stocks like But Son Cement Packing Joint-Stock Company (BBS) and Doan Xa Port Joint-Stock Company (DXP) also posted modest gains despite solid first quarter earnings.
Hoan, a Saigon Securities Inc. client, said most investors are day traders who prefer large caps for their liquidity.
Of 90 listed companies that have announced both first quarter and last year’s results so far, 48 reported lower profits than the year ago period.
But in the last month only 18 listed firms saw their prices fall.
Saigon Securities Inc., the country’s biggest publicly traded brokerage, said its net income fell 74 percent year on year in the first quarter to VND30 billion, with turnover falling to VND105 billion from VND351 billion.
But its share advanced 36 percent in April against a 11 percent rise for the VN-Index.
thanhnien, vietnamplus
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