Stock market crashes

20-Jan-2018 Intellasia | The Saigon Times | 6:00 AM Print This Post

Stocks took a nosedive on January 17 as sellers locked in profit after recent strong gains, with the VN Index shedding a hefty 28.27 points, or 2.66 percent, at 1,034.69.

According to securities enterprises, market sentiment was negatively affected by a draft amendment to Decision 87, proposed by the State Securities Commission (SSC).

According to the document that has been sent to brokerage firms for feedbacks, the equity required for each margin lending transaction should not be below 60 percent, a significant increase from the current 50 percent. The money flow, especially from local retail investors, therefore could be tightened. This indicates some caution by the SSC regarding the strong rally in share prices this year.

Blue chips were key factor behind the steep decline as only confectionery firm KDC and construction firm ROS in the VN30 basket managed fractional rises. Meanwhile, VNM, the country’s leading dairy enterprise, fell 3.9 percent at VND200,100 per share.

The HCM City market saw 332.6 million shares worth VND8.6 trillion exchanged at the end of the day, down 2.2 percent and 4.7 percent versus Tuesday respectively. There were VND1.6 trillion worth of block deals, including VND150.6 billion worth of shares of lender HDB and VND133.8 billion worth of shares of electronics retailer MWG.

The HNX-Index closed at the intraday low of 120.42, losing 1.17 points, or 0.96 percent, against the previous day. Trading volume and value on the Hanoi bourse jumped 17.7 percent and 42 percent at 76.7 million shares worth VND1.1 trillion.

Among large caps, lender ACB rose 0.52 percent at VND39,000 a share while many other firms such as oil and gas stock PVS and securities enterprise SHS dropped strongly. Bank stock SHB, which moved flat at VND10,600 per share, took the lead for liquidity with 24.3 million shares exchanged, followed by PVS with 10.6 million shares.

Speaking to Vnexpress news site, Nguyen The Minh, head of capital market analysis department of Saigon Securities Inc. (SSI), said the market may extend its downtrend in the near term as the selling pressure remains strong.

From a technical perspective, the market had seen risks rising after beating the 1,050-point level. The VN Index is expected to slide to the supporting level of 1,000 points or even lower within the next sessions.

Explaining the sharp decline on January 17, Minh said that local equities did not enjoy support from global markets any more. Banking and petroleum stocks encountered profit taking pressure after making nice gains while the main index had repeatedly reached new highs in a short period.

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Category: Stocks

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