Increasing buy orders at mid-session on December 17 helped restrain the downfall of the VN-Index, which closed off just l.64 percent to 434.87 points.

The value of the day’s trades remained modest, at 1.44 trillion VND (77.8 million USD), with a subdued volume of 38.3 million shares. Eximbank (EIB) and Sacombank (STB) continued as the most-active stocks, on volumes of 2.9 million and 2.7 million, respectively.

Heavier buys on the Hanoi Stock Exchange helped lift the HNX-Index by 0.50 percent on December 17 to a close of 138.23 points. Volume rose to 19.4 million shares, worth a combined 479.5 billion VND (25.9 million USD). Brokerage Kim Long Securities (KLS) saw the greatest volume, with 4.2 million shares traded.

Quality stocks were being traded at bottom prices, commented Adrian Cundy, head of research for VinaSecurities Co, in a report on December 16. He noted that market price-to-earnings (P/E) ratios were estimated at 14x by Bloomberg, lower than on many regional markets, and many stocks were trading at significantly lower than many analysts’ target prices.

But the fact that commercial banks were reportedly refusing to extend credit to securities investors, forcing them into sell positions in order to repay earlier loans, was effectively depressing the market, Cundy said.

With the Government predicting a rise in inflation as the Tet (lunar new year) holiday approached, he said, “it’s hard to say where the carnage will stop.”

An analyst with a Hanoi-based securities company, who requested anonymity, said that the market gave no indications of an impending breakout but was trending toward a consolidation period.

“This can be seen by lower highs and lower lows...or, technically speaking, a falling wedge,” he said.

The market has declined by 32 percent over the past 40 days, said John Harackiewicz from Sacombank Securities Co’s research and private equity division.

Harackiewicz said his firm saw the market at the end of the current steep dip and recommended investors initiate buying. Cundy suggested long-term investors look at consumer goods, oil and gas, raw materials and industrial shares as the government moving from a monetary to a fiscal stimulus strategy focusing on infrastructure./.