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Markets tumble to close on six-month low   2010-05-22 - VNS

The nation’s stock markets closed out a bumpy week with a plunge yesterday, as the indices on both national stock exchanges sank to a six-month low.

On the HCM City Stock Exchange, the VN-Index shed 3.94 per cent of its value, or nearly 20 points, ending yesterday’s session at 483.69.

Trading volume rose slightly to 60 million shares, worth a combined VND2 trillion (US$105.3 million).

A whopping 94 per cent of codes posted losses, with 85 per cent dropping to their floor prices. Saigon Securities Inc (SSI), the most active share on the southern bourse, slid 4.84 per cent to a close of VND35,400 ($1.86).

On the Ha Noi Stock Exchange, the HNX-Index tumbled by 6.53 per cent to end the day at 152.69, also a six-month low. Volume fell 20 per cent to 43.4 million shares while the value of the day’s trades decreased 27 per cent to VND1.22 trillion ($64.2 million).

Investors panicked to sell shares across the board, sending 90 per cent of codes into a tailspin. All blue chips registered losses with PetroVietnam Construction (PVX), still the most-active share on a volume of 5.1 million, dropped by 6.43 per cent to close at VND26,200 ($1.38).

Vinaconex (VCG), Asia Commercial Bank (ACB) and Kim Long Securities (KLS) all closed down by more than 4 per cent.

Repeated steep slumps on global markets, with the US market logging its biggest loss of the year on Thursday, triggered runaway selling among domestic investors, said FPT Securities Co’s analysts in their market report yesterday.

"Many investors felt it was a bit late to exit risky assets," the report said, suggesting that the steep decline of the market combined with high trading volumes reflected a deeply pessimistic investor psychology.

In addition, increased pressure to sell mortgaged shares was driving many investors to sell at floor prices.

"The further the market sinks, the higher the pressure to sell shares to service loans is," said Bao Viet Securities Co director Vo Huu Tuan.

During the market rise over the past two months, many investors invested in speculative stocks using financial leverage, and many such shares have slid by over 25 per cent, triggering their sale.

Most analysts agreed the market trend would be difficult to forecast for the next sessions in light of the unstable investor psychology.

By contrast, foreign investors concluded yesterday as net buyers on both bourses, picking up a net of over VND113 billion ($5.9 million) worth of shares.



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