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Vietnam Business » Vietnam Stock Market News » Stocks suffer worst week of year

Stocks suffer worst week of year

The stock market closed out its worst week of trades this year as investors hurried to cut losses on fears of a further decline, sending indices plunging on both national stock exchanges.

On the HCM City Stock Exchange, the VN-Index lost a whopping 7.11 per cent over the course of five sessions, closing on Friday at 483.69. Average daily volumes also declined 23 per cent to 56.2 million shares, while the average value of trades fell by 18 per cent to nearly VND1.85 trillion (US$97.4 million) per day.

On the Ha Noi Stock Exchange, the HNX-Index dropped by an even more substantial 12 per cent from the previous weeks close, ending Fridays session at 152.69 points. Volumes averaged 42.8 million shares per day, a decline of 14.4 per cent from the prior week, while the average daily trading value also decreased by 12 per cent to around VND1.36 trillion ($72 million).

The market saw on rising session during the week on Thursday, when blue chips, particularly financial shares, saw a short-live rebound. But Thursdays trades became a "bull trap" as sell orders flooded both boards, causing exchanges to lose their greatest value since the beginning of this year.

"The market fell too fast and too hard, going beyond the expectations of all market participants, including institutional investors," said Viet Nam International Securities Co general director Pham Linh.

Penny stocks had been leading the market advance in recent weeks, and when the market started its correction, those shares turned around dramatically, even dragging down major shares, Linh said.

As many investors had exploited financial leverage to speculate in penny stocks, the declining market forced them to sell shares and service loans before losses became massive, added FPT Securities Co analyst Nguyen Van Quy.

"If such pressure isnt eased, the market is unlikely to receive a new tide of investment capital," Quy said.

At the same time, domestic investor psychology was being affected by events on the US stock market, further sending investors into a panic.

"The Vietnamese stock market has always been influenced by the herd mentality," said Japanese financial expert Takeshi Fuji. "During times like this, investors sell together and buy together, determining market trends." SJC Securities Co general director Huynh Anh Tuan added that the lack of supporting domestic news focused investor attention even more intently on global markets.

Except one session of net sales on Wednesday, foreign investors net buyers on both exchanges throughout the week, responsible for a total net buy of over 3.2 million shares, worth a combined net of VND200 billion ($10.5 million). However, since their trades accounted for only 5 per cent of the total market, they were unable to influence the overall downward trend.

Vietnam Business And Financial News Network. Source [english.vietnamnet.vn]

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