Vietnam Stock Market Evaporates US$17 Bln: HSBC

The listed stock market of Vietnam has seen its value evaporate US$17 billion since the beginning of this year as the benchmark has fallen to three-year record low, the Saigon Marketing magazine said, citing the report of the Hong Kong-Shanghai Banking Corporation.

 

So far, the total market capitalization of both Hochiminh Stock Exchange (HOSE) and Hanoi Securities Trading Center (HASTC) is estimated at US$13 billion, accounting for 19 per cent of the country's GDP.

 

In compared with the peak in March, 2007 when the market value on the two bourses reached nearly US$29 billion, or 40 per cent of GDP, the current VN-Index has lost 75 per cent.

 

Amid the global financial crisis, foreign investors have been still net sellers of local shares for three consecutive months. They sold VND8.2 trillion of shares and bonds in November, compared with VND13.5 trillion in October, and VND193.3 billion in the first trading week of December.

 

The foreign share sales have been blamed for the falling demand of local investors in the market.

 

Technical analysis expert of the HCM City Securities Co. (HSC) Christopher Blank said “Investors seem to be standing in the margin of the market because such supporting news as petrol price decrease, the slash of the prime interest rate to 10 per cent, or the government’s US$1-billion package to stimulate the economy could not raise up their sentiment.”

 

While the market demand is still very weak, a large number of new shares have recently flooded the bourses, which is also blamed for the market’s slump. In several months to come, about 20 companies will also float their shares on bourses.

 

Currently, analysts predict the supporting benchmark is around 240-260 points. (Saigon Marketing www.cafef.channelvn.net) )