Strong words rock the market

Directive 01 was posted on the State Bank’s website yesterday afternoon, in which it required to reduce credit for non-production activities, including the stock market. It also mentioned the possibility of applying reserve requirements for bank “if needed”.

Meanwhile, Viet Capital Securities said in a note to its clients that “the State Bank is probably increasing the reserve requirement, which could see the market continue to slide.”

“The market is in the middle of ‘tightening’ process, which means not all the “bad news” is wholly released yet,” said Vietinbank Securities.

Meanwhile, measures for reining in US dollar and gold prices were not detailed in the directive.

Numerous investors bailed out their holds at low, supported by a number ones buying-in with hope picking bottom. Liquidity therefore was pushed up on southern bourse to VND974.62 billion ($47.08 million).

Saigon Securities Inc. (SSI) led the most active stocks with more than 3.6 million shares changing hands, followed by Refrigeration Electrical Engineering Corp. (REE) and the Itaco (ITA) with more than two million units traded each.

At the close, the VN-Index lost 8.29 points or 1.78 per cent to 457.83 points, deeply dragged by 280 stocks dropping compared with just 19 gainers.

Major stocks were strongly sold, among them Hoang Anh Gia Lai (HAG), PetroVietnam Finance (PVF), ITA and Kinh Bac City (KBC).

Banking shares slightly fell down, with Vietinbank (CTG) off 0.7 per cent, Sacombank 0.2 per cent and Vietcombank 1.2 per cent.

The two supportive stocks Bao Viet Holding (BVH) and Vincom Corp. (VIC), however, hit the ceiling, in which BVH was buoyed by foreigners while VIC was largely bought in by domestic ones.

Foreigners increased their buying on the southern bourse to 3.51 million shares.

On the Hanoi Stock Exchange (HNX), liquidity soared greatly. Trading volume more than tripled to 53.98 million shares worth VND765.55 billion ($37 million).

The benchmark HNX-Index dropped 3.99 points, or 4.19 per cent, to close at 91.17 points.

The bourse sunk into the red with 289 stocks off against 25 up. Foreigners net sold up to more than VND9 billion ($434,800).

Notably, Kim Long Securities’ (KLS) trading volumes sharply jumped to 6.6 million topping the bourse, after the securities firm announced the meeting on changing its business this afternoon.

According to a source, Kim Long might withdraw from the securities sectors. KLS had fell to VND12,200, down 6.15 per cent, in today’s session.