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Saturday, June 22, 2024

Susceptible to manipulation

By Trieu Duong

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Selling off large-cap stocks is a frequently used strategy by experienced investors to sow panic among retail investors and initiate a chain reaction of sell-offs in other stocks. This, in turn, leads to a sharp decline in broader market indices. The vulnerable index On Thursday, October 16, the VN-Index took a nosedive, losing over 46 points, or 4.2%. This was the second major market drop of the year, following an even steeper plunge of over 55 points on August 18. The sheer magnitude of this decline saw nearly US$7.8 billion wiped off the market capitalization of the Hochiminh Stock Exchange (HOSE) in a single session, equivalent to VND186 trillion. The panic began at the opening of the trading session, with the VN-Index starting a significant 21 points lower than the previous day’s closing. Notably, Vingroup shares were aggressively offered, with tens of millions of shares available for sale from the outset, severely impacting investor sentiment and plunging the market into turmoil. Market analysts attribute this sell-off frenzy to the news that Vingroup had issued a convertible bond tranche worth US$300 million, which is set to fall due in 2028, with coupon rates ranging from 9.5% to 10%. This development acted […]
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