VietNamNet Bridge – Almost US$1.2 billion worth of share value
evaporated on the nation's stock market in a single session on Friday as
investors reacted to the resignation of Sacombank chairman Dang Van Thanh.
The latest incident was more
devastating to the market than the $920 million loss caused by the arrest in
August of Nguyen Duc Kien, one of the founders of Asia Commercial Bank (ACB).
At a press conference on
Saturday, Sacombank (STB) formally announced Thanh's resignation and the
appointment of Pham Huu Phu to replace him. Phu also announced at that time
that Thanh had sent a letter seeking to resign from the bank's board of
directors, effective today.
Phu said Thanh had been asked to
come in and work with investigative agencies on Thursday, but the bank had not
received any conclusions from the investigation.
In an effort to diminish the
adverse effects on the market, a representative of the State Bank of Viet Nam,
Nguyen Hoang Minh, said the State Bank could spend up to VND28 trillion ($1.3
million) to support the liquidity of Sacombank.
Sacombank's current liquidity was
fairly sound compared to ACB's problems which occured in prior months, Minh
said.
"Risks that derive from
unusual information once again had a strong impact on investors after the
scandal of Kien's arrest not so long ago." wrote Bao Viet Securities Co
analyst Tran Hai Yen in a report. "This could be the main factor driving
movements next week on a market that is still in an overall downward
trend."
Rumours surrounding Thanh and his
family were the primary causes of the market plunge last week, driving the
VN-Index to a cumulative loss of 4.2 over the course of the week. The index
closed at 375.26 points on Friday.
Daily trading volume improved
slightly on the HCM City Stock Exchange, averaging 43 million shares, with an
average daily value of VND600 billion (US$28.6 million).
Thanh's family members were
rumoured to be gradually divesting from Sacombank and its affiliates. Thanh's
wife, Huynh Thi Bich Ngoc, resigned from the board of sugar processor Bourbon
Tay Ninh (SBT), while his son Dang Hong Anh, chairman of Sacombank's real
estate arm Sacomreal (SCR), completed the sale 21.45 million of SCR shares,
reducing his ownership from 24.9 per cent to 9.9 per cent.
SBT and SCR both dropped to their
floor prices on Friday, while STB closed off 3.1 per cent from the previous
day.
On the Ha Noi Stock Exchange, the
HNX-Index fell by over 5 per cent last week to conclude Friday's session at a
mere 51.06 points. However, driven by bottom-catching efforts, the volume of
trades jumped 23 per cent to an average of 30.6 million shares, worth an
average of VND200.6 billion ($9.6 million) per day.
And foreign investors continued
to pour money in Viet Nam's stock market despite the market fall. They
concluded last week as net buyers on both markets, picking up shares worth a
combined net of VND73.5 billion ($3.5 million).
Bottom-catching efforts generally
drove trading on both bourses last week.
"We are not too pessimistic
and expect that the last trading session and any further declines in this week
should be considered a washout of weak stocks," said Yen.
"This will be necessary to
provide better momentum for a coming rally which we expect to appear
soon."
VietNamNet/VNS
Business & Investment Opportunities
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