April 4, 2011: VN Index Extends Loss As Selling Pressure Rises
Vietnam’s stocks kicked off the new week in the red as sellers were more willing to accept lower prices on concerns over interest rate hikes and liquidity tension.
The benchmark VN Index lost 1.92 points or 0.41% to 457.25 leaving the key support 460 further behind. Volume and turnover improved a bit to 24.64 million shares traded for VND541.89 billion compared with 23.35 million shares traded for VND490.86 billion last Friday but still lower than last week daily average of 28 million.
Analysts could not see evidences for a sustainable rally short term risks are seen though they see opportunities for long term players.
Analysts say the increase in re-financing rate often trigger an interest rates hike, local media report some local banks already raised effective interest rates to 17% through promotion despite the official rate cap at 14%. Standard Chartered Bank forecast Vietnam’s OMO refund rates to climb as high as 14% in the third quarter of this year.
Liquidity is not expected to improve soon as brokers have to limit their financial support when Circular 226 on securities companies’ working capital risk management becomes effective in April; investors are in the sidelines amid tough macro conditions, high interest rates.
In related news, local gold prices fell off VND37 million a tael to a range of VND36.67-VND36.8 million/tael, while the dong stayed at the midpoint of 20,703 a dollar in the inter-bank market.
The market opened with a gain of 0.78 point or 0.16%, volume shrank to 0.5 million shares traded, indicating caution in place. The market showed efforts to regain 460 critical point but it failed to gather enough steam, the benchmark went into the negative territory again and said good-bye to 460 as sellers lost patience. VN Index closed at the low of the day.
The market breadth was negative with losers outpaced gainers by a ratio of 165 to 63 and 60 stocks unchanged. As many as 15 stocks lost 5% limits while 7 others closed up 5% cap.
SSI was the most active stock with 1.4 million shares traded, closing down 2.7% to VND21,600.
EIB ranked second in the list with 0.6 million shares traded, closing down 0.68% to VND14,500.
CTG was in the third place with 0.6 million shares traded, closing down 0.36% to VND28,000.
ITC and REE followed in the list with 0.5 million and 0.4 million shares traded, respectively.
Foreign investors continued to net buy VND39.58 billion shares on HOSE.
On the Hanoi Stock Exchange, the HNX extended it losing streak with a loss of 0.95 point or 1% to settle at 90.1. Volume stayed flat at 19.4 million shares traded for VND293.1 billion compared with 19.36 million shares traded for VND292.27billion last Friday.
The market recorded 61 gainers, 207 losers and 40 unchanged stocks. As many as 9 stocks closed at upper limits while 26 others closed at the lower limits, the trading band on this bourse is 7% both sides.
VND was the most active stock on the bourse with 2 million shares traded, closing down 2% to VND14,500 on average.
THV ranked second in the list with 1.8 million shares traded, closing down 2.9% at VND10,100.
KLS was in the third place with 1.5 million shares traded, closing down 2% to VND9,800.
Foreigners continued to net buy VND4.29 billion on this bourse.
