Stocks Move Sideways, Liquidity Falls

The Ho Chi Minh Stock Exchange’s (HoSE) VN-Index on October 11 closed at 459.32 points, adding just 0.06 points or 0.01 per cent. Hanoi Stock Exchange’s (HNX) HNX Index shed 0.43 points or 0.35 per cent to 121.26 points.

HoSE’s liquidity fell to  a record low with only 23.7 million shares worth VND638.5 billion ($32.7 million), the lowest level for eighth months. HNX’s trading volume also fell to 18.5 million shares and VND435 billion ($22.3 million).

Market liquidity fell sharply as investors feared the third quarter’s earnings season might not be good as expected.

Le Chi Phuc, Saigon Invest Fund Management Company’s investment director, said markets would not benefit from corporate earnings as banks, property developers, which accounts for 70 per cent of the VN-Index, would not have good earnings due to its business challenges this year.

While positive factors fade in October, demand force might not spike, while sellers are more vulnerable. Investors should watch the market with caution and have fund protection plans ready, added Nguyen Duc Hung Linh, director with Saigon Securities Incorporated (SSI) Investment Advisory.

Overall earnings per share for listed firms is estimated to grow 9.6 per cent this year, compared to around 31 per cent last year, according to StoxPlus statistics.

In early trading, financial stock BVH, which was previously heavily bought by foreign investors, hit ceiling to VND63,000 a share but at the close, BVH shed VND500 a share to VND59,500 each. On the HoSE, 84 stocks rose, 111 fell and 71 were unchanged.

On the HNX, 189 fell, 80 rose and 38 were unchanged with banking share ACB fell VND100 to VND28,000 a shares, brokerage KLS and financial PVX fell VND200 to VND14,100 and VND22,200 a share, respectively. Click & Phone Securities (GBS) debuted today on HNX with 67,600 shares traded at VND13,300 a share on average. 

Foreign investors today remained buyers of Vietnamese large cap equities but with lower volumes, while domestic investors have not returned, making the market index move in a tight range. 

Foreign investors bought two million shares today, much lower than previous days, focusing on BVH with only 173,480 shares, followed by fertilizer marker DPM 141,050 shares and GMD 127,310 shares.

The oversupply concern also dominated market focus after Nguyen Son, head of the country’s stock market watchdog State Securities Commission’s (SSC) market development department, said his commission had received many applications for new share sales as listed firms sought ways to raise funds amidst high lending rates.

“With the increasing number of applications, we are afraid that this year would be recorded time for new share sales, even much higher than the 2007,” Son told VIR.

In 2007, when the domestic stock market was in bubble territory, listed firms issued just VND63 trillion ($3.3 billion), while in 2008, the number was VND29 trillion ($1.53 billion) and was VND21 trillion ($1.1 billion) in the crisis year of 2009, according to StoxPlus statistics.