Market loses billions of greenbacks, SSC advises caution

Hanoi (VNA) - The local stock market suffered losses amounting to billions of dollars on a single day - January 18, while the State Securities Committee (SSC) asked investors to be cautious about selling shares.

As global crude oil prices saw a continuous slide to their lowest point since 2014, the local stock market lost 113.3 trillion VND (over 5 billion USD) since early this year. The biggest losses so far were recorded on January 18, when the country's two bourses lost 36.7 trillion VND (1.64 billion USD).

On the same day, HCM Stock Exchange's (HOSE's) capitalisation fell some 9 percent to 1,044 trillion VND (46.5 billion USD), while the Hanoi Stock Exchange's (HNX's) capitalisation also dropped 7.3 percent to 140.5 trillion VND (6.25 billion USD).

So far this year, the capitalisation on HOSE has dropped by a total of 102.2 trillion VND (4.55 billion USD) and HNX has fallen by more than 11.1 trillion VND (494.3 million USD).

The benchmark VN Index sank 3.1 percent on January 18, sending valuations to the lowest level since August, according to data compiled by Bloomberg.

Experts from Saigon-Hanoi Securities (SHS) said investors' panic over the falling price of crude oil had caused losses for many markets within a week. The panic quickly spread to the local market too, the SHS representative said.

Some brokers thought many of their customers were waiting for the price to bottom out in the chaos while others were fleeing the stock market.

Broker Vuong Dinh Tien said the panic was unnecessary, adding that investors should remain calm and seek out good stocks, which were now being sold at prices they could never have dreamed of before.

Broker Vu Nhung from Tan Viet Securities said her customers had paid another 5 or 10 percent to increase the proportion of shares available on January 18, adding that "investors can sometimes act a bit greedy when they get the chance."

In line with the brokers' advice, instead of selling shares like other investors, middle-aged investor Nguyen Thi Mai bought her preferred shares from the real estate and garment industries, saying she got the chance to do so while others were overreacting with panic.

Meanwhile, Andy Ho, Managing Director and Chief Investment Officer at VinaCapital Group, Vietnam's largest fund, told Bloomberg.com he was boosting his equity holdings, saying the benchmark gauge's recent slump to a 13-month low had made stocks attractive.

Ho, who thought the local equities were "undervalued", with the recent slump making them even cheaper, confirmed that the fund was buying local stocks. The manager did not share information on which shares or how many he bought.

Ho said he favoured property and consumer companies because the local economy would continue to expand, despite the global downturn.

Further, the SSC sent an official letter to the two local bourses, asking them to review transactions and manage any rumours.

The SSC said the recent global economic situation, particularly the falling oil prices, had influenced the stock market; however, Vietnam, compared with other countries, was considered the least affected. The SSC added that the sharp decline on January 18 was only caused by psychological factors and was not an indication of the macroeconomic prospects of Vietnam or the operational efficiency of the listed companies.

Thus, Deputy Chairman of the SSC Nguyen Thanh Long told the two bourses to report all unusual transactions and to coordinate with the relevant authorities to stifle the rumours in order to better manage the market.-VNA