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Stock investors meet long term opportunities   2009-12-15 - SGTT

Excluding the companies issuing extra shares, now there are at least two share codes FBT and FPC posting the market prices at the lowest level in the last one year. Meanwhile, VN Index now is in the reduction range of 38.2-50 percent compared with the peak of 633 points established on October 23. Most securities companies and experienced investors said that now is the right time for medium and long term investment.

Head of a company's supervision board purchased 500 shares on December 8 when the share price reached the floor level. Till December 11, the share code continued recording the floor price in three consecutive sessions. On December 10, there was the rumour that a director board's member of Company L registered to buy 10,000 corporate shares when the company's share lost 30 percent in value while internal shareholders raced to register offloading.

Moves of internal shareholders showed one of signals for investors to evaluate price of that share. Aforementioned events proved that the share prices fell in the attractive range as for internal shareholders who can know clearly about company's operation.

Based on the statistics of December 11, the HCM City bourse had some share codes posting the reduction lower than the market's average level. The share codes included VIC, MAFPF1, OPC, REE, SSC and FPT. In which, notably the market price of VIC coded share saw an impressive increase despite being split because of additional issue. From the market's general bottom level of 235 points on February 24, VIC share price grew by over 300 percent.

Overall, VN Index jumped by 260 percent from 235 pts on February 24 to 633 pts on October 23. For example, many stocks recorded the growth of 400 percent from the bottom level, such as NTL, REE, SSI, TCM and TRI. Specialists said that demand stimulus package helped boost the development of the stock market so after SBV announced to end the short term lending rate subsidisation, absolutely the investors will re-consider the market. Also the psychology of investors is under the movements of gold and foreign currency market.

According to the analysis of FPT Securities Co (FPTS), the bad movements will be continued on the stock market, beyond the most pessimistic forecast. Most shares are in the downward trend along with the reduction in liquidity.

Previously, the trading value in both markets stood at 3-4 trillion dong each session, partially thanks to the mortgage lending. When the monetary policies were tightened up, securities companies started to stop lending, pulling down the market's liquidity along with the worries on securities offloading risks. Due to these, the VN Index continued falling.

It is predicted that investors could race to offload shares if VN Index returned 420 pts. Therefore, just after the market slid to below 450 pts, some investors sold a big share volume.

Fiachra Mac Cana from HCM City Securities Co said, most shares suffered the impacts of offloading pressure because banks enhanced the debt withdrawal and brokers reduced the securities backed loan provision. These moves could be prolonged in two weeks. Therefore, first off, there will be no opportunity for short-profit seekers.

While the investors were afraid of offloading wave, medium and long term investors just in late November were proposed to use their ownership capital to invest in the shares standing in the attractive price range.

In an online talk last weekend, Vu Huu Dien-manager of Dragon Capital's investment portfolio said that the share prices dropped to the fairly attractive level for medium and long term investment in fields of consumer goods, banking and real estate. If 2009 P/E ratio is 11.5 times, 2010 P/E ratio will be 10.5 times.

Quoting Nguyen Quang Bao, deputy general director of Ban Viet Securities Joint Stock Co (VCSC), after the market recession, the financial targets of many listed firms stayed at attractive level. Investors could pump capital into the share codes with high profitability equalling to saving rates.

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