Large caps cushion the market, VN-Index still falls 1 percent

VNS
Shares plummeted on Tuesday despite the growth of some major blue chips as negative information continued to weigh on small and medium cap stocks.
On the Ho Chi Minh Stock Exchange, the VN-Index dropped 0.96 percent to close at 1,438.94 points. The southern market’s index lost nearly 5 percent in the last five sessions.

Market leaders were banking stocks. BIDV (BID) climbed nearly 3 percent and Vietcombank (VCB) increased 1.6 percent. These two shares added nearly four points to the VN-Index. Other large caps such as Vincom Retail (VRE), Vinamilk (VNM), PV Gas (GAS) and brewer Sabeco (SAB) also increased which cushioned the market's fall.

Without the support of blue chips, the HNX-Index on the Hanoi Stock Exchange plunged 5.42 percent to end the day at 421.21 points. The northern market’s index lost 10 percent in the past two days.

The strong selling pressure on small and medium stocks pushed the market down.

One-third of the total 562 declining shares on the two national stock exchanges hit the floor price. Securities, construction and real estate were the main downward forces which declined 6.6 percent, 5.6 percent and 2.3 percent, respectively, according to data on vietstock.vn.

FLC slumped for six sessions in a row (four of which it was locked on the floor) following the scandal in which its chairman Trinh Van Quyet had not disclosed sales of 74.8 million FLC shares on January 10.

On January 18, the State Securities Commission (SSC) issued a decision to fine him VND1.5 billion (US$65,200) for his unreported trading. The transactions involving Quyet’s share sales were also cancelled.

In addition, Quyet was subject to the additional sanction of being suspended from securities trading activities for five months.

Quyet has paid the fine.

This is an unprecedented measure for Vietnam’s stock market but SSC said it was aimed to safeguard the transparency and stability of the market. The market watchdog also said it would continue to closely coordinate with relevant authorities in investigating and handling cases with signs of violations in the securities market.

Liquidity decreased significantly with only 836 million shares worth VND25.5 trillion ($1.1 billion) traded in the two markets, down 25 percent in volume and 29 percent in value compared to Monday’s levels.

However, foreign traders were strong net buyers with a net buy value of VND900 billion on the two exchanges. Most of the trade focused on shares on HCMC’s bourse such as Sacombank (STB), Vinamilk (VNM), Saigon Securities Inc (SSI) and Vietcombank (VCB).

VNS

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