Tue. Nov 29th, 2022

VietNamNet Bridge – Stocks are now the choice of many investors in the context
of the gloomy stock market, unclear gold market and stable dollar price.
Trillions of dong are believed to be pumped into the stock market.

Vietnam, stock market, investors, price, gloomy

A good beginning…

The Vietnamese stock market witnessed a smooth opening trade session in the year
of snake, February 18, with the prices of 60 listed shares hitting the ceiling
levels, while only 11 shares saw the prices decreasing to the floor levels. 200
shares, or 60 percent of the listed shares on the bourse, increased in prices,
including the shares of mining, securities companies and penny stocks.

Especially, the total trading volume soared on the two bourses to 71 million
shares in Hanoi, worth VND600 billion, and 70 million in HCM City, worth VND1
trillion.

Another boisterous trading session took place on February 19 with VND1trillion
worth of shares transferred just after one hour of opening.

Prior to the Tet holiday, securities investors had many happy weeks when both
the VN Index of the HCM City bourse and HNX Index of Hanoi bourse increased
continuously by hundreds of percents just within a short time.

Foreign investors continuously poured money into the stock market right after
hearing the news that the watchdog agency considers raising the maximum foreign
ownership in listed companies.

In January 2013 alone, foreign investors’ net purchase reached VND3 trillion, or
$140 million.

Just some days ago, analysts were still cautious when talking about the stock
price increases, thinking that the upward trend would last for a short time
only. However, the bustling trade sessions with high trading volumes recently
have helped change their mine. Both analysts and investors believe that the
stock market would bounce back this year.

Stock market recovery to awaken the national economy?

Despite great efforts, no significant signs of economic recovery have been seen
so far. A report by the State Bank of Vietnam showed that by the end of January
2013, the credit growth rate had decreased by one percent. Meanwhile, the number
of enterprises which got dissolved or stopped operation has increased by 7
percent in comparison with the end of 2012.

Experts think that it would not be a bad choice if the government gathers
strength on recovering some key markets, including the real estate and stock
markets.

The State Securities Council is considering applying a series of measures to
strengthen the stock market, including the ones to provide credit to securities
investors, open the door more widely to foreign investors and offer tax
incentives, build up derivatives market and improve the share listing quality.

However, experts have also warned that if Vietnam puts overly high hopes on the
recovery of the stock market as the driving force to recover the national
economy, this would lead to immeasurable consequences.

The investors’ excitement has helped warm up the stock market. However, the
extreme stock price increases have also caused worries. A lot of shares, which
investors once tried to bargain away because of the big losses of the
enterprises, have unexpectedly become expensive.

Though real estate listed firms reported the huge loss of hundreds of billions
of dong in the fourth quarter of 2012 and the big inventories of trillions of
dong, their shares still have been increasing in recent trading sessions.
Forecasting the upward trend of the stock prices, securities investors tend to
buy everything they can, while they do not consider the quality of the products
they buy. Therefore, analysts have every reason to worry that a new bubble in
the stock market may take shape.

Manh Ha

By vivian