Stock Market: A Report Makes Reversion

The Ho Chi Minh City Securities Trading Centre (HSTC) admitted the 52^nd stock on its trading floor. The newly listed stock is SMC of SMC Investment and Trading JSC with a chartered capital of VND60 billion (US$3.75 million), or 6 million shares. The depart price of SMC was VND32,000 (US$2) a share and the trading volume was 37,970 shares.

 

The market saw 47 stocks ending lower, one higher and four unchanged. The VN-Index lost 8.64 points to close down at 512.40. The trading volume was 1.64 million shares (- 2 per cent) and 220,000 fund certificates (+ 12 per cent), totally valued VND101 billion (US$6.3 million).

 

REE had the largest trading value with VND11.4 billion, or 12 per cent of the total trading value of the market, followed by STB (Sacombank) with VND10.9 billion, GMD (Gemadept) with VND9.5 billion, VNM (Vinamilk) with VND8.6 billion and BMP (Binh Minh Plastic) with VND7.6 billion.

 

According to the HSTC’s statistics from the Market Bulletin late October 31, 2006, the earnings per share (EPS) and price on earnings (P/E) shares positively grew in the latest four quarters. The EPS level is higher than that of the same period of 2005 and the P/E stands at suitable level. The Vietnamese stock market promises a robust and stable growth in November, hoping no “too hot” or “too cold” changes as from February to August of 2006.

The notice make a reversion in supply and demand balance in the October 31 trading day. Buyers placed 3,718 for 4.53 million stocks and fund certificates, an increase of 69 per cent against a day earlier, while sellers gave 2,060 orders for change ownership change of 2.68 million units, decrease of 23 per cent. The VN-Index closed at 511.54 points.

 

Among 25 price-rising stocks, the latest-listed SMC stock led the market. Unlike CII, STB or VSH, the SMC was offered at reasonably low depart price of VND32,000 each, equivalent to the attractive P/E of 7.14 (EPS of the latest four quarters was VND4,480). The SMC stock reached the ceiling price twice to VND33,600. The trading volume was 82,710 stocks; however, the ceiling buying redundancy was 28,900 stocks.

 

Therefore, if the depart price is offered at reasonable level, the VN-Index will not be negatively affected as it took place in July 2006. The market record in 2006 showed that when a stock is moved from the OTC market to the listing bourse, the supply-demand balance will reduce the market price (CII and STB) or lift up the market price (VNM, SJS and UNI). In the coming time, the listing of quality stocks of large companies will possibly help the VN-Index reached a new growth after a two-month accumulation.

The three-session sharp fall in late October cause the VN-Index to lose 13.45 points in total. The trading session on the first day of November was very active. The VN-Index regained 9.84 points to surpass the 520-point benchmark (521.38 points). Especially, the fever rush for the SMC stock continued increasing. Buyers spent more than VND8 billion (US$500,000) to buy 227,910 SMC stocks at ceiling price but the sellers were willing to change hands 8,400 stocks. The wide difference in supply and demand may continue lifting up the market price of SMC stock.

The following stable shows statistics and rankings of EPS in the latest four quarters.

EPS in the latest four quarters	Quantity	Stock code (EPS descending)	Note
More than VND40,000 a share	01 stock	SJS	Due to insufficient statistics in the latest four quarters, the basic EPS of nine following stocks are based on their financial report of late last year: BTC, CYC, IFS, SHC, STB, TTC, TYA, UNI and VFC
From VND5,000 to less than VND9,000 a share	08 stocks	BMP, AGF, NKD, REE, HAS, BT6, KDC, NHC
From VND4,000 to less than VND5,000 a share	10 stocks	GIL, SAM, SMC, SGC, SSC, VNM, GMD, DHA, HAP, TNA
From VND3,000 to less than VND4,000 a share	04 stocks	RHC, SFC, TMS, SAV
From VND2,000 to less than VND3,000 a share	15 stocks	COM, DCT, FPC, TS4, KHA, HTV, MHC, BPC, IFS, BBC, UNI, CAN, VSH, STB, CYC
From VND1,000 to less than VND2,000 a share	10 stocks	PMS, SHC, DPC, VTC, PNC, TYA, CII, VFC, TTC, SGH
Less than VND1,000 a share	03 stocks	TRI, BBT, BTC
Negative (due to less)	01 stock	LAF

The following table shows statistics and rankings of the P/E in the latest four quarters:

P/E in the latest four quarters	Quantity	Stock code (Ascending P/E)	Notes
Below 10	11 stocks	SJS, SMC, NHC, RHC, HAP, KHA, CYC, BPC, BMP, HAS, BT6	Due to insufficient statistics in the latest four quarters, the basic EPS of nine following stocks are based on their financial report of late last year: BTC, CYC, IFS, SHC, STB, TTC, TYA, UNI and VFC
From 10 to less than 15	19 stocks	DCT, DPC, TNA, GIL, AGF, TS4, SGC, SFC, HTV, SAV, MHC, NKD, TTC, FPC, BBC, PNC, CAN, COM, REE
From 15 to less than 20	11 stocks	VSH, SSC, DHA, UNI, TMS, PMS, SAM, KDC, IFS, SHC, VNM
From 20 to less than 25	04 stocks	VTC, GMD, CII, VFC
From 25 to less than 50	04 stocks	SGH, STB, TYA, TRI
From 50 to less than 100	02 stocks	BBT, BTC
No ranking for negative ESP due to loss	01 stock	LAF

Source: Vietcombank Securities