Stocks fall as investors cut losses

HA NOI — Sleepy trades drove down indices for a fourth day yesterday and caused the HNX-Index to drop below its initial level of 100 points for the first time since 2008.

The HNX-Index closed yesterday's session at 98.48 points, a decline of nearly 3.1 per cent.

The value of trades on the Ha Noi Stock Exchange totalled just VND390 billion (US$18.6 million), on a volume of only 23.2 million shares. With shares in the Song Da, PetroVietnam and Vinaconex groups dropping most sharply, 249 out of 314 listed stocks all posted declines on the day.

On the HCM City Stock Exchange, meanwhile, the VN-Index closed down by over 1.8 per cent to 433.54 points. Trading continued in the doldrums with only 29.4 million shares changing hands, down 33 per cent from last Friday. The value of trades also dropped to only VND636.5 billion ($30.3 million).

An investor nicknamed Nguoi Do Thai (The Jew) blamed the fall on the volatility of interest rates, gold prices and foreign exchange rates, which restrained new money flows into securities.

"Listed companies haven't shown business improvement since the crisis but are facing more tough times due to the volatility," said The Jew. "This discourages investment, particularly from speculators.

"Investors are sitting out the markets, waiting for brighter prospects, or trying to cut losses," he said.

Ngo Minh Duc, head of investment at a HCM City-based securities firm, indicated that yesterday's poor market performance was not solely due to sellers.

"I sensed some bottom-catching when the VN-Index dipped from 443.08 to 432.72 points at mid-session," Duc said. "However, purchasing power seems to be exploiting only the lowest level of sellers."

The HCM City market yesterday saw a new listing, by construction and equipment installation company LILAMA 18 (LM8), which opened trading at a reference price of VND19,000 (US$0.95) per share before declining to VND17,000 at the close.

With charter capital of VND80.5 billion ($ 3.8 million), LM8 has targeted earnings this year of VND574 billion and a net profit of VND17.5 billion. Figures for the first nine months showed the company at earnings of VND369 billion and a net profit of over VND16 billion – a figure comparable to the entire year of 2009. LM8 expects to pay a 12-per-cent dividend on this year's profits.

Source: vnagency.com.vn