Blue chip wash outs concluded a disappointing week for domestic investors.
On the HCM City Stock Exchange, the VN-Index lost 9.76 percent last
week to close at 432.87 points – the lowest standing since November 22,
2010.
Blue chips contributed to the market loss by falling
11.57 percent, with key pillars such as insurer Bao Viet Holdings (BVH)
and multi-business Masan Group (MSN) fell consecutively to their floor
prices.
BVH closed on May 20 at 77,500 VND, down from
90,000 VND last Monday while MSN closed on May 20 at 97,000 VND down
from Monday's 117,000 VND.
"As the pacemakers for the
VN-Index in recent months, which took turns leading the VN-Index and
boosted it to 480 points in April, it was hard to accept their wash-out
in just one week," said Nguyen Van Khanh from a-based securities
company.
Khanh watched Vietcombank after it announced a
big additional listing from the State's holdings which lifted its shares
(VCB) to the ceiling price in two earlier sessions sending VCB to the
top as the new VN-Index pacemaker.
"Unfortunately, the
wash-out was big enough to stagnate the trading in VCB," he said,
blaming the media for mentioning a new VN-Index calculation at an
inopportune moment.
"Blue chips are the most popular
stocks among foreign investors and exchange-traded funds who seems to be
the most active in domestic markets right now," he said, revealing that
this sector purchased a net 74.2 billion VND (3.5 million USD) last
week, compared to 45.5 billion VND (2.2 million USD) in the previous
week.
"But the recalculation plan (which may not be
governed by blue chips) might worry them to boost sell-offs or
restructure their investment portfolio," he added, noting substantial
sell-offs by this sector last Friday.
The value of the HCM
Stock Exchange enjoyed a 16 percent increase over the previous week to
517 billion VND (24.6 million USD) per day on an average volume of 26
million shares traded.
On the Hanoi Stock Exchange, the HNX-Index fell 6.12 percent last week, plunging to a historic low of 76.98 points.
Value of the Hanoi market rose 2.76 percent to 306.4 billion VND
(14.6 million USD) per session, with nearly 25 million shares traded
each day.
"Although the value sounds higher and hints at
attempts to buy at low prices, the figure is modest," said analysts at
FPT Securities, who blamed the poor performance on instabilities in the
credit system.
They noted the deposit rates on the
open-market which increased from 14 percent to 15 percent, and the
climbing deposit rates in commercial banks forced the State Bank of
Vietnam to post more warnings to credit institutes.
"It
sounds like the State Bank is insisting on the target to curb
inflation," Khanh said. "As a result, the stock markets may continue
this bearing until the third quarter".
The May inflation
rate for Hanoi City was released late last week revealing a lower
increase of 1.76 percent compared to the March and April rates. The
nation's inflation rate is expected to be lower in May, "but this hardly
encourages a loosened monetary system right away", said Khanh.
The FPT Securities' analysts said that the sharp fall last week might
create some technical rallies this week "but the capital boost could
remain cautious". /.