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Stocks in retreat mode over US financial turmoil   2008-09-18 - ThanhNien

Vietnam’s major stock market in Ho Chi Minh City continued to retreat Wednesday as investor confidence was hit by the turmoil in US financial markets, analysts say.



The VN-Index of the 158 leading firms and four closed-end funds on the exchange tumbled 18.71 points, or 4.1 percent, to close at 437.24.

Trading volume decreased to 14.4 million shares worth VND525 billion (US$32 million). Of the index’s members, 149 stocks lost out while 12 emerged unscathed.

“The decline of the domestic stock market recently is mainly because of the influence of instability in the US financial markets,” Bloomberg quotes Ngo Van Minh, an analyst at Hanoi-based EuroCapital Securities Co., as saying. “Both local and foreign investors were puzzled by many tremendous and unexpected upheavals in the world’s financial markets recently.”

“Although investors don’t know whether the uncertainties will affect their investments in Vietnam or not, many of them stopped buying and selling temporarily, considering that a safe approach in the current sensitive situation,” said Minh.

Sherman Chan, an economist at Moody’s, also said the US financial turmoil will weaken investor sentiment.

But Pham Do Chi, chief economist of HCMC-based Vinacapital Investment Management Ltd., says recent declines in local stock prices offer investors a buying opportunity.

“The stock market’s going down today may be an effect of the financial turmoil in the US, but it is also an opportunity,” Bloomberg quoted Chi as saying. “Retail investors shouldn’t panic since Vietnam’s macro economy is under control. Vietnamese companies are still doing fine.

“The retail investors shouldn’t follow foreign investors who were asked to pull investments out of emerging markets, not just Vietnam only, by their investors abroad,” he added. “I see this as a good entry point to buy the stocks here.”

Foreigners remained the net sellers, notching up VND35.4 billion. Among the stocks they sold the most were Pha Lai Thermal Power (PPC), PetroVietnam Fertilizer and Chemical Joint Stock Company (DPM), steel maker Hoa Phat Group (HPG), oil drilling PV Drilling (PVD) and Vinh Son Hydropower (VSH).

The Hanoi stock exchange also went down, with the HASTC-Index dropping 10.34 points, or 6.67 percent, to finish at 144.74.

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