Ailing market still in need of fresh blood

Total matching value of  the two bourses skimmed around VND600-800 billion ($29-39 million), except Tuesday August 14’s session having high liquidity thanks to the Military Bank’s  (MBB) extraordinary transaction.

Although the Ho Chi Minh Stock Exchange’s (HoSE) VN-Index slightly ended up during the week, the benchmark was driven up by just a few blue-chips.

The Hanoi Stock Exchange’s (HNX) HNX-Index slipped 1 per cent to below the 70 points. Investors are now turning their attention to merger and acquisition (M&A) rumours.

“In such a wearisome situation of the market, I think there can only be hope in specific stocks relating to corporate restructuring rumours,” said Nguyen Duy Tuyen, an investor having a trading account at Sacombank Securities.

But even M&A news can easily ebb away investors’ confidence. Local media on Wednesday August 15 reported that PetroVietnam Finance (PVFC) was in talks with Western Bank to buy into the bank, but the news just helped PVFC shares advance only 3.3 per cent in the same day and the stock soon fell back on Thursday August 16’s session.

The market’s sluggish trend and investors’ cautious sentiment came as numerous negative macroeconomic news including a price hike in gas and electricity and low credit growth hurt the economy.

Gas price hikes weighed on investors’ sentiment right from the beginning of the week, as several petroleum traders were considering applying for retail price hike in the end of the week before.

Global petroleum product prices remained high and according to Saigon Securities Inc.’s estimates, Vietnamese traders were incurring a loss at about VND600 per litre for RON 92 gasoline.

“Investors had been all aware of the apprehensions in adjusting gasoline prices,” said Saigon Securities Inc. (SSI) in its report.

The continuous increase in gasoline and electricity prices are largely anticipated to boost consumer price index (CPI) into positive territory. Although investors previously expected CPI to turn positive after weak demand making the index negative in June and July, such reasons for CPI to turn head even make investors more discouraged.