The terror-struck captivity of banking tycoon Nguyen Duc Kien on August 21 unnerved securities investors. The Vietnamese stock market witnessed giant drops caused by panic selling. And, it is uncertain how long the current performance will go if the information about his detention is not made clear.
Appalling fears caused massive sell-offs across the board. Almost all stocks lost ground since Kien was captured for alleged business wrongdoings. The market sentiment worsened together with rumours about Kien’s case.
Mass drops
On August 21, the VN-Index sank 20.44 points, or 4.67 percent, to end at 416.84. The HNX-Index slumped 3.7 points, or 5.24 percent, to 66.95. Liquidity surged from previous days, with 62 million units on HOSE and 51 million units on HNX, worth VND1,800 billion in total.
Investors rushed to sell off shares at lowest prices on fears of continued slumps. The electronic board was flooded with floor-priced orders.
The severity of the case was evidenced on August 22 and 23. Asia Commercial Bank (ACB) was traded at the floor price through the day but investors shrugged off the HCM City-based lender. On August 23, the VN-Index lost 17.41 points, or 4.24 percent, to 392.82. The HNX-Index slipped 3.42 points, or 5.29 percent, to 61.23. Most traded stocks were closed at floor prices.
Worthwhile calmness
Bao Viet Securities (BVSC) recommended investors holding shares because there was a high likelihood of a short-term rebound.
When the market got into panic, nearly all stocks plunged to their lower price limits. However, this seemed to be a good chance for wise and brave investors. Viet Dragon Securities (VDSC) said: This is the problem of a businessman. We maintained our positive assessments on macroeconomic development authorities are striving to realise. Therefore, the sharp decline afforded a golden opportunity for investors to enter the market.
This was the chance for medium-term investors because valuations were attractively low, according to Saigon Securities Inc (SSI). “Drops of stocks with good fundamentals will slow down before taking the soonest rebound on the market,” it said.
For many investors, it was quite risky to increase holdings when the seizure of iconic magnate Nguyen Duc Kien remained unclear. His business career was mysterious to the public.
Kien may have huge influence on the banking industry and involve in some other economic sectors but investor reactions were excessive. Kien’s case was just an event, a catalyst for a short market shaking. This shows the fragility of Vietnamese stock market.
Le Minh
Vietnamese
