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VN-Index falls on finance stock news
A last minute sell-off swept away earlier increases in the VN-Index, which ended the day at 515.99, down 0.72 percent.
The value of the day's trade at the HCM City Stock Exchange hit VND2.3 trillion (US$121 million) with 53.8 million shares changing hands. The Corporation of Refrigeration, Electrical and Engineering (REE) outdid Sacombank (STB) to reclaim its reputation as most-traded stock, with 6.6 million shares, closing up 3.81 per cent at VND54,500.
Nguyen Thanh Hoa, an investor with Ocean Securities, blamed the market decline on the fall in finance stocks, including VietinBank (CTG) and Bao Viet Holdings (BVH), despite the positive news from VietinBank that the bank would sell a 25 per cent stake to foreign strategic partners.
"The fall might be for profit-taking after a long holdings," Hoa said.
Meanwhile, Nguyen Thanh Binh, Head of Analysis Department at APEC Securities, said with Dau tu chung khoan (Securities Investment) that the macroeconomic situation hadn't been supportive enough, putting brakes on market development.
He added that interest rates remained high while the inflationary rate would possibly be high in the first quarter, leading the central bank to be cautious about loosening monetary policies.
The longer the interest rate remained high, the longer the VN-Index would be bullish, Binh said, noting that a strong assistance at 495 points would prevent the market dipping steeply.
Foreigner trading encouraged the decline in the southern market although they sold off a meagre 500,000 shares, becoming net-buyers, netting VND94.3 billion (About $5 million).
On the Ha Noi exchange, the HNX-Index closed flat at 169.85 points, with trading activities down to 26.5 million shares.
Market value was VND881.3 billion ($46.4 million), with Kim Long Securities (KLS) the most active stock with 3.5 million shares changing hands.
Fiachra Mac Cana, Head of research at HCM City Securities Corp., said the CPI would have implications over the next several months, especially if it presented a picture of stable growth and not the spiral many had feared. In addition, Fiachra said, the authorities now were preparing to ease restrictive policies and gradually add some liquidity to the system.
"The market will react positively to any relative improvement in liquidity and, as we have seen, sentiment tends to pick up on this very quickly."
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