Bourses fall as loosened trading band introduced

VietNamNet Bridge – Sustaining the previous week's rising momentum, the first two trading days of last week saw the remarkable surge of indexes in both trading bourses. However, many investors soon had to say goodbye to joyful feelings for the week's remaining three days.

In the past week alone, the VN-Index fell from 378.20 to 366.02.

One day before the application of the new loosened trading band on June 19, investors witnessed three straight days of points shed from the VN-Index and HASTC-Index.

In the past week alone, the VN-Index fell from 378.20 to 366.02, a one-week loss of 12.18 points, equivalent to 3.22 per cent.

Trading volumes reached 54.5 million shares over the past week, rising 76.3 per cent, with the cumulative value of the week's trades on the HCM City Stock Exchange reaching over VND1.7 trillion (US$105.4 million), 98.7 per cent higher than the previous week.

Contrary to the trading situation in the first two days, massive numbers of shares up for sale failed to find buyers over the three final sessions of last week.

Last week also saw a series of well-established stocks such as STB, SSI, FPT, DMP, HPG, and REE close at their floor prices, part of a dipping trend in the VN-Index.

On the last trading session of the week, foreign investors were strong buyers. They bought over 4 million shares and only sold 750,000, on the HOSE while at the Ha Noi Securities Trading Centre, foreign investors bought over 31,800 shares and sold only 400.

According to some investors' predictions, a gloomy picture ahead for the domestic stock market would depend on whether the VN-Index would fall to 350 or not, should next week see consecutive sessions of mass selling.

"Many investors thought the re-loosening of the trading band would promote the stock market. However, the slipping indexes shook investor confidence and created a negative impression that had nothing to do with the internal situations of listed companies or other macroeconomic factors," said Le Dat Chi, a lecturer at the HCM City University of Economics.

Chi confirmed that the local stock market was still guided and affected by the psychology factor of investors.

An analyst at the HCM City Institute of Banking, Le Tham Duong, said: "Investors should be more concerned about basic and technical analyses of the market, they would be wiser to make decisions about selling shares without the influence of the psychological element."

In Hanoi, over the past week, the Ha Noi Securities Trading Centre also witnessed two initial upward trading sessions followed by three consecutive sessions of downturns, with the HASTC Index closing at the end of Friday's trading session at 110.40.

For the week as a whole, the Hanoi Index lost 3.41 points, or 2.9 per cent of its value.

Total volume changing hands for the week on the northern bourse was 15.2 million shares, dipping 1.1 per cent against the previous week's figure, while the total value of trades was VND344.36 billion ($20.8 million), rising 12.2 per cent against the previous week.