HA NOI (VNS)— The stock market was back on an uptrend by the end of last week but investor confidence has yet to really recover, which drove trading down on both national stock exchanges.
Three consecutive rises toward the end of the week could not pare the loss that the VN-Index incurred on Tuesday and overall, the Index saw a modest slide of 0.11 per cent to a close of 477.15 on Friday.
The VN30 tracking the top 30 shares on the HCM City Stock Exchange also slumped 0.66 per cent to 547.70 points.
On the Ha Noi Stock Exchange, the HNX-Index witnessed a heavier loss of 2.09 per cent during the course of the week, finishing Friday’s session at 62.78 points.
Investors panicked when both markets suddenly plummeted on Tuesday without any negative information. This session took away around US$1.65 billion worth of market capitalisation on the two bourses.
After the panic, no “special” or “adverse” information was announced which helped calm investors. However, investors became more cautious after recent sessions that saw trading becoming more and more sluggish on the two markets.
Total trading volume on the HCM City exchange declined by 35.5 per cent from the previous week, averaging 64.8 million shares, worth almost VND994 billion ($47.6 million). Meanwhile, the volume of trades on the Ha Noi bourse also fell 43.5 per cent, reaching more than 58.6 million shares, worth nearly VND467 billion ($22.3 million).
“The continuous drops in liquidity showed that cash flow is quite restrained and not ready to return to the market. To be able to sustain the current uptrend, the market trading needs to be much improved,” analysts of FPT Securities Co wrote in a report.
According to many analysts, most investors are scratching their heads over why Tuesday’s session could witness such a strong decline despite the quashing of a previous rumour that spooked the market.
“In addition, investors began to pay more attention to increasing sells by foreign investors last week which make them more cautious,” analysts of the financial website commented on a report.
Foreigners still concluded last week as net buyers of a total VND245 billion ($11.7 million) worth of shares in HCM City, but they mainly bought shares of property giant VinGroup (VIC) which was worth more than VND275 billion ($13.2 million). If removing these buys, foreign investors sold a net of nearly VND30 billion ($1.4 million) over last week.
Net sell focused on Vietinbank (CTG) worth VND97 billion ($4.6 million) in order to restructure ETF (exchange-traded fund) portfolio after CTG was removed from the FTSE Vietnam Index.
On the Ha Noi market, foreigners were responsible for a modest net buy of just VND6.1 billion ($292,000).
“The market seems to have levelled off after a three-month rally driven by investors’ high expectation of policy changes. The bullish sentiment has weakened and the market will likely witness unfavourable movements if supportive news is not announced soon,” said Nguyen Xuan Binh, analyst of Bao Viet Securities Co. — VNS