Correction continues despite low CPI

Buyers were hesitant and appeared unwilling to raise prices. The offer, on the other hand, strengthened as long as the faintest signs of rebounds struggled to emerge.

Heavyweights ended the streak of being index saviors, turning into those taking away most points. GAS took away 1.2 points while MSN and VCB together removed further 1.7 points from the VN-Index.

Those having most positive effects towards the VN-Index were rather the smaller players, ITA, REE and POM.

At the closing bell, the VN-Index declined 6.37 points, or 1.4%, from the session earlier to end at 448. Volume and value on the Hochiminh Stock Exchange (HOSE) slumped 30.3% and 7.8% against last Friday to 58.7 million shares worth VND930 billion.

The Hanoi market also declined with turnover dropping sharply to VND395 billion. The HNX-Index lost 1.43% and ended the day at 61.16.

Foreigners stayed on the buying side for the 20th day in a row on HOSE. However, their net buying amount on Monday only equaled a half of the amount observed in the last three days and also marked the lowest level in January.

On the northern bourse, they turned to the selling side after three days of being slight net buyers.

Viet Capital Securities Company (VCSC) said that this correction is normal as the VN-Index had rallied 22.6% from early December to the peak of 465.3 on January 16 while the HNX-Index also advanced 22.8% over the same period.

“Logically, we think investors would like to exit and relax before the Lunar New Year,” VCSC said.

HCMC Securities Corp. said that with profit taking in full swing and buyers yet to return, the current correction might last for a few more days.

“However, the retreat has been orderly with a very low number of stocks hitting the floor over the last few days. Sentiment is then still quite positive and we may well see increased buying energy. We hear some talk about another possible interest rate cut in the first quarter, inflation allowing of course. Meanwhile,

early fiscal year 2012 result fragments from a handful of blue-chips have been fairly decent, albeit without too many surprises,” the broker predicted.

* The State Securities Commission (SSC) from early this week will continue surveillance of short selling after signs of such an activity has been noticed in recent time.

According to an official of SSC, as the market has rallied with strong liquidity since late last year, there has been detection of short selling over some stocks with some organizations and individuals involved. The practice refers to selling of a security that the seller does not yet own.

Short selling has basically been put under control after SSC increased surveillance of and penalties for illegal short selling last year. Some securities enterprises have rejected giving this service to customers but the problem has recurred as groups of customers have been connected through brokers.

SSC said that violations will be punished severely and any securities companies violating the regulation will see their brokerage operations suspended.

Brokerages are forbidden from providing short selling services to clients, but it is widely known that many companies are still illegally offering this service.