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HCMC shares down again as investor confidence dries up   2008-11-25 - AFP and Bloomberg

The Ho Chi Minh City stock market lost for a sixth straight day as the VN-Index edged closer to the 300-point mark that analysts seem expect it will breach sooner or later.



The index of 166 companies and four closed-end funds opened in positive territory to finish the first session 1.2 percent higher at 322.79.

Nguyen Manh Toan, deputy CEO of HCMC-based VinaGlobal Securities Corporation, said the strong opening was a result of the higher US market close last Friday

But the index dropped in the next two sessions to close at 317.93, or 0.32 percent lower, partly because losses on some Asian markets dampened investors’ confidence, Toan said.

Asian stock markets Monday were down amid uncertainty over the world economy despite a US government rescue pledge for global banking giant Citigroup.

Hong Kong shares closed 1.6 percent down, while Seoul shed 3.3 percent, Singapore dropped 2.5 percent and Taipei 0.25 percent.

Shanghai was 2.6 percent lower, although Sydney recovered early losses to finish the day 0.3 percent up. Tokyo was closed for a public holiday.

Trading volume on the Ho Chi Minh Stock Exchange Monday was 13.3 million shares as 73 stocks fell, 69 advanced and 28 remained unchanged.

Toan expected the VN-Index to be range¬-bound between 310 and 330 this week, adding investors’ confidence would get a boost if global stock prices posted two or three straight days of gains.

But Nguyen Dinh Phong, brokerage services director of VNDirect Securities Corp., said: “Given investors’ negative reaction in today’s trading, it is safe to say the market will go below 300 points soon.”

“Investors are losing confidence in the market. It is a very worrying sign. They reacted negatively to good news about the interest rate cut and the rebound in the US market last week.

“The reason investors are turning their backs on the market is the lack of transparent information about the country’s economy. They cannot access reliable data about the unemployment rate, consumer confidence, banks’ bad debts, decline in exports, companies’ performance and other critical economic indicators.

“In other words, the information we have is insufficient to paint a picture of Vietnam’s economy. Unless they see that the value of shares truly reflect the health of the economy, they will be reluctant to buy.”

Hanoi-based FPT Corporation, a software producer and mobile phone distributor, rose VND2,000, or 3.96 percent, to close at VND52,500. The company’s pretax profit in the first 10 months of this year was US$60.9 million, or a year-on-year 30 percent increase, according to a statement posted on the stock exchange’s website last week.

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