VietNamNet Bridge – The first six months of the year saw more ups and downs than any other period since the stock market was established: sometimes it was too bustling, other times, too quiet.
Peaks and valleys
On March 12, the VN Index reached its peak: 1,170.67 points. Several days before, on March 9, the HASTC Index also hit a record when it closed at 454.81 points. These were higher figures than even the most optimistic could have hoped for.
At that time, the stock market was immersed in what was described by media and analysts as a ‘securities fever’. Experts talked much about the skyrocketing securities prices and predicted the bubble, which would cause the collapse of the stock market.
The collapse did not occur, but just one month later, on April 24, the VN Index fell to the bottom, 905.53 points, while the HASTC dropped to 284.7 points in June 2007.
Meanwhile, the OTC market has been gloomy since April 2007, and there is no sign of recovery. Most OTC share items have dropped by 20-50% in price compared to early March 2007. The bustling market once propelled investors high into the sky, and then the gloomy market eventually made them disillusioned.
However, Tran Ngoc Nam, a securities analyst, said that what happened was a good scenario, because the collapse did not occur, while both management authorities and investors have learned from the so-called ‘securities fever’.
Dr of Economics Nguyen Quang Hung shares the same view, saying that with the VN Index recovering and hovering at the 1,000-1,100 point level, the stock market shows signs of stabilising.
Paradox: blue chips prices stable, penny stocks skyrocketing
The stock market has been witnessing many paradoxes of share prices. A lot of questions have been raised, like “why did BMC, TCT, SGH, LBM, HAX and SFI, little known stocks, once see their prices skyrocket, while blue chips like FPT, GMD, SSI, ACB, SAM, VNM, REE, or ITA , just see their prices remain stabile or decrease?”
One time, issuing more shares was favoured by many companies as the move could help ‘kill two birds with one stone’: the issuance both could bring more capital, while companies did not have to pay interest on the capital.
However, share issuance has lately become not a good choice for companies as investors have become “full” of shares. Now, giant companies are planning to launch big sums of shares into the market: ACB with 143mil more, FPT 30mil, STB 19mil, VNM 8mil, REE 4.7mil, GMD 2.8mil. These shares seem to be being issued at an inauspicious time, as the market is presently quiet.
The first six months of the year was also the time that witnessed the trading volume reaching the highest peak in the last seven years since the market was established.
Analysts have been talking about the huge capital of several billion dollars that foreign investors are injecting in Vietnam. However, the huge capital has not been disbursed yet as there is no more room for foreign investors and the foreign ownership in many local companies has nearly hit the allowed ceiling level. In the last month, the market became quiet and the VN Index continuously fell down, leaving the market shrouded in stillness.
Many analysts have predicted the recovery of the market in the second half of the year. However, they said that the recovery would still largely depend on many issues, including the IPOs of big corporations, and improvement in the management work of state agencies.
(Source: Viet Nam Net) |
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