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VN-Index drops as new shares flood market   2008-11-12 - Viet Nam News

A wave of sell-offs overwhelmed buys on the HCM City Stock Exchange yesterday, causing share prices to slump.

Some analysts expressed worries that new or additional listing at this time might add to the current oversupply of shares and negatively affect the market in the short term.

The VN-Index shed 14.29 points, or 3.9 per cent, to close at 351.71, with about 15.6 million shares changing hands for a total trading value of VND474 billion (US$28.2 million).

The day witnessed 135 losers and 23 gainers.

Sacombank (STB) led the market with 3.7 million shares traded, followed by Phu My Fertilisers (DPM) with 692,000 shares and the FPT with 537,000.

Shares of Basa Joint Stock Co (BAS) debated on the southern bourse yesterday but hit the floor of their regulated trading band to end the session at VND14,400 ($0.85) per share.

Some analysts expressed worries that new or additional listing at this time might add to the current oversupply of shares and negatively affect the market in the short term.

But the director of SME Securities' HCM City branch, Bui Van Quang, said that new listings would also provide wider choices for investment portfolios. Newly-listed firms could compete on the market if they proved their business effectiveness, he said.

"Demand on the market has significantly increased for the last two weeks and this is a basis for the market to rally in the short term," commented the An Binh Securities analysis department. "Renewed interest of major investors will prevent the market from plunging deeply."

The department said that, in a context the global economic recession, the domestic stock exchange was tracking much more closely with international markets.

Lawrence Wolfe, director of business development at Dong A Securities, told Dau tu Chung khoan (Securities Investment) that the connection has been clearer since the world financial crisis deepened in mid-September but that, when the world financial situation stabilises, the VN-Index would likely return to greater, dependence on the country's internal conditions relating to economic growth, exports and foreign direct investment.

Among foreign investors, net sales in yesterday's trading on the HCM City bourse contracted to a value of VND26 billion ($1.5 million) from Monday's VND79.2 billion ($4.7 million), with 1.2 million shares bought and 2.2 million sold.

The Ha Noi market, meanwhile, saw 133 losers and 12 winners. The HASTC-Index plunged 5.1 per cent to 112.31 on a trading volume of 8.3 million shares and a total value of VND230.3 billion ($13.7 million).

Asia Commercial Bank (ACB), with 1.3 million shares changing hands, Bac Ninh Produce (DBC), with 804,000 shares, and Kim Long Securities (KLS), with 780,000, were the most active on the Ha Noi market.

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