Aug 25, 2012

Vietnam - Stock market experienced quake, but will recover soon: analysts

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VietNamNet Bridge – Some individual investors have urged the State Securities Commission (SSC) to make an urgent intervention to stop the slide of the stock market. Meanwhile, experts believe that the market needs to perform its way.

Nguyen Ngoc Chinh, General Director of Sen Vang Securities Company, said that it is really alarming that the stock index has dropped by 40 points just over the last three days.

Chinh believes that the market has fallen into a dangerous situation and it needs the urgent intervention from SSC. The purchasing power nearly got exhausted on August 23, which showed the sharp fall of investors’ confidence and signaled a possible runaway of investors from the market.

He said on Vietstock that the watchdog agency needs to provide updated information to investors and advise investors to keep calm in the circumstances. Investors should be informed that the stock market is being governed by the bad news about Kien arrest, but also backed by the good news about the good business performances of many listed companies.

Meanwhile, President of VNDirect Securities Company Pham Minh Huong has noted that the biggest problem of the market now is the decreasing confidence of investors in banks and bank shares.

Therefore, she believes that what the State should do now is to reassure investors and provide transparent information. Meanwhile, Huong disagrees with the idea that SSC should order to halt the operation of the stock market for some days.

“The stock market would correct itself in accordance with the economic laws, while no need to make administrative interventions at this moment,” she said.

Le Dang Doanh, a well-known economist, also thinks that rushing to bargain shares away is a psychological reaction of some investors. Therefore, he believes that the best way to protect investors is to provide sufficient information and calm investors down.

Sharing the same view with Doanh, former Deputy Minister of Natural Resources and the Environment Dang Hung Vo said the stock market needs to run its way.

“It’s quite normal that the market is influenced by the bad news, but the market should not stop operation just because of the bad news,” he said.

Vo went on to say that the order to halt the transactions on the stock market would do more harm than good. Investors would feel unsafe about the liquidity, since they cannot sell stocks once the market closes the door.

Meanwhile, Hoang Thach Lan, a senior executive of MHB Securities, thinks that the decision of halting operation should have been released two days ago, while such a decision would not help much for now.

While Vietnamese got panicky because of the dramatic stock price fall, Japanese investors still keep optimistic about the Vietnamese stock market.

The news about Kien arrest has appeared on all the big finance information channels such as Yahoo!Finance Japan, Morningstar Japan, and MarketHack.

A Japanese investor, who lives in HCM City wrote on Twitter that domestic investors have been trying to bargain shares away, including the shares of the banks which in no way have relations with ACB, while foreign investors have taken full advantage of the stock price falls to buy shares in big quantities.

Imai Masayuki, a well-known expert about Vietnam’s economy and securities, at the interview given to a securities TV channel in Tokyo, said that Japanese investors still keep confidence in Vietnamese stocks. He commented that the arrest of Kien is not so serious that investors need to run away.

He also said that it is not easy to find the wonderful opportunities to make money like in Vietnam, where the stocks can bring high dividends and the stocks are very cheap.

Compiled by Kim Chi


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