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Hopes fade for renewed rally
Stocks continued to lose ground May 18 on the nation's stock exchanges. Despite analysts telling investors that current declines were merely a technical correction, hopes continued to erode that the market would resume its recent four-month rally.
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Source: VietstockFinance
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"Flows of cash into the market have not been substantial enough to further boost share prices," sighed VNDirect Securities Co chairwoman Pham Minh Huong.
Quach Manh Hao, deputy director of Military Bank Securities Co (formerly Thang Long Securities Co), predicted the current correction would last up to two weeks.
"Market values have been maintained at quite a high level recently, and general market prospects continue to be positive," Hao said.
But, FPT Securities Co analysts countered, "The value of trades is declining over time, signalling weakening chances for a rally."
VietCapital Securities Co analysts agreed, noting a large number of negative indicators affecting investor psychology. A number of businesses have gone bankrupt or been forced to halt operations in the first four months of the year, credit growth remains stagnant, and inventories continue to be high.
Earnings reported by many listed companies in the first quarter were also meagre, suggesting the second-quarter outlook was no different, they said. Most brokerages had reached their limit for financing clients' margin trades, and foreign investors have shifted to a position as net sellers.
On the HCM City Stock Exchange yesterday, both the benchmark VN-Index and the more narrowly-focused VN30 Index both retreated by 1.7 per cent to close yesterday at 434.95 and 504.61 points, respectively.
The value of trades reached about VND1.2 trillion (US$57 million), while volume totalled around 80.4 million shares. Decliners overwhelmed advancers by a margin of 233-34.
Of the 30 leading shares tracked by the VN30, only those of food processor Hung Vuong (HVG) advanced, while shares of Tan Tao Investment Group (ITA), financial conglomerate Ocean Group (OGC), Petrovietnam Finance (PVF) and Kinh Do Confectionery Corp (KDC) all plunged to their floor prices.
On the Ha Noi Stock Exchange, the HNX-Index fell by 3 per cent to 73.81 points with losers outnumbering gainers by 251-50. The value of trades rose by nearly 30 per cent over the previous session to VND706.9 billion ($33.6 million), on a volume of 74.3 million shares. Habubank (HBB) recovered the spot as most-active share, with 7.2 million changing hands.
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