Nov 1, 2012

Vietnam - Liquidity drops to nine-month low

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HCMC – As investors were pessimistic, the local market saw another slow trading session on Tuesday with liquidity plunging to the lowest level since January. The VN-Index marked the second straight losing day, dipping 1.5 points, or 0.38%, to close at 389.86.

Stocks opened slightly in the red and moved higher before fluctuating in a narrow range and ending the morning session almost flat. In the afternoon, trading saw a weaker opening and the index fell off again to close almost at the lows.

Liquidity on the Hochiminh Stock Exchange sharply contracted with only 23 million shares worth VND279 billion traded at the end of the day, falling by 22.4% and 38.5% against the previous session respectively.

Decliners outnumbered advancers by 128 to 77, including 19 stocks hitting the ceiling prices and 36 others plunging to the floor prices. As for the index heavyweights, GAS saw gains while VNM and VCB suffered some losses.

Tan Tao Investment Industry Corporation (ITA) remained the most actively traded stock, dropping 2.3% against the previous day to VND4,200 per share on a volume of 2.5 million shares, followed by Duc Long Gia Lai Group (DLG), which rose 2.8% to VND3,600 with 1.2 million shares traded.

Foreigners virtually disappeared from the market, accounting for just 8.7% and 7% of the market’s buying and selling value respectively. HCMC Securities Corp. said that the closure of the New York Stock Exchange (NYSE) for weather reasons did have some affect on foreign trading levels on Tuesday and this might well still be a factor on Wednesday.

The Hanoi market continued its downward spiral although turnover improved strongly to VND259 billion. The HNX-Index fell 0.51 point, or 0.95%, from the session earlier and ended the day at 53.13.

There were 72 stocks rising while 92 stocks posted losses, including 32 stocks going up to the ceiling and 36 stocks dropping to the floor prices. Foreigners accounted for 1.4% of the buying value and 1.3% of the selling value.

Viet Capital Securities Co. said that weak third quarter earnings at Bank for Investment and Development of Vietnam (BIDV), the second largest bank by assets, dragged down banking stocks. BIDV reported third quarter earnings of VND196 billion, down 56% year-on-year.

Investors were concerned that other bank earnings will be just as weak, sending the banking sector down 0.7% on the southern bourse and down 2.5% on the northern exchange. The Hanoi bourse was dragged down by Asia Commercial Bank (ACB) and Saigon-Hanoi Bank (SHB), which lost 2% and 5% respectively.

“We expect the market to decline slightly and the VN-Index to test the 385 to 387 point support zone tomorrow. This is considered as a buy convergence support zone,” the broker added.

Phuong Thao - The Saigon Times Daily


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