Market Plunge Continues
By Nguyen Quan
Transactions on Vietnam’s stock market on December 9-15: The market last week continued to slide, toppling the most pessimistic forecasts with market liquidity kept plunging
Last period (Dec. 7-11), the VN-Index shrank by 10.26% from the week before to 444.16 points. Trading volume and value continued to drop to only 35.03 million shares, worth approximately VND1.37 trillion, from 39.74 million shares, worth over VND1.62 trillion during the previous period.
A deputy director of a securities firm said that many investors trading at his firm had to sell out stocks in their portfolio as prices had fallen to the stop-loss point. As a result, selling orders were frequently placed at low prices or even floor prices, which led to an oversupply and a deep plunge on the market.
Commenting on market performances in the near term, the deputy director said all bad news had been known, and the gold and U.S. dollar markets were cooled and moving toward a more stable cycle after a period of overheating. “However, the sluggish market may cause further losses to investors who are still holding on stocks. Regrettably, I don’t have cash in hands. Otherwise, this is a handsome opportunity for cash-rich investors.”
According to financial analysts, when the market is extremely bearish, a large amount of stocks can be undervalued. Buying such underrated stocks will probably make a good yield for investors when the market recovers.
Dinh The Hien, a finance specialist, says this point in time poses a chance for investors to put in money in line with a strategy of gradually buying the same stock undervalued by the market. He explains, “I spend 30% of my capital to buy 100 shares of, say, stock A to trace the bottom low of the market when the VN-Index stands at 450 points. If loss is between 10% and 15%, I will continue to buy another 100 shares of stock A. If the stock goes on to incur a further between 10% to 15%, I will continue to buy it as I anticipate the market bottom will be at around 400 to 430 points.”
The VN-Index inched up during the first two sessions of this period. At the close of the December 15 session, the VN-Index earned 1.05 points or 0.23% to end at 459.44 points with over 29.64 million shares changed hands, worth nearly VND1.06 trillion. On Hanoi bourse, the HNX-Index, after a strong gain in the December 14 session, fell on Tuesday by 3.34 points, or 2.27%, to close at 143.61 points with the total trading volume in excess of 14.29 million shares, worth more than VND389 billion.
Most investors remain highly vigilant to minimize risks in response to recent downward corrections. On the other hand, business results in the last quarter of the year show no signs of a sudden surge. Therefore, the demand does not increase on a large scale, which is mirrored by a low trading volume despite a better economic situation of a recovering economy.