Ha Noi (VNA) – The VN-Index on the first days of 2008 experienced the continued downward trend to return to the level of 900 points, which pundits attributed to the surplus in supply.
Finishing the first week of trading in 2008, VN-Index lost 23.93 points as compared with the last trading session in 2007 to stay at 903.09 points.
King Yoon Cheah, Head of the Research Department of the Mekong Securities Company, said VN-Index decreased due to the increase of supplies caused by a series of initial public offerings (IPO) of big companies and banks in 2007 and early 2008 such as the Bank for Foreign Trade of Viet Nam (Vietcombank) and the Saigon and Ha Noi Beverage Corporations.
Some listed companies also added capitals and issued more shares at the year-end, thus making the supplies abundant, King said.
In the second half of 2007, over 90 companies issued additional shares, including a series of joint-stock commercial banks like the Viet Nam Private Bank (VPBank), the Export-Import Commercial Bank of Viet Nam , and the Industrial-Commercial Bank of Viet Nam .
The supplies increased while the demand declined. According to the statistics of the State Securities Committee, the traded volume in the first trading sessions of 2008 had not exceeded 500 billion VND, the lowest figure over the past year.
Also according to King, the fact that foreign investors have been in their New Year holidays is another reason for the decrease of demand.
Trinh Viet Cuong, advisor of Japan ’s Okasan Securities Company, gave another answer. According to him, last year saw strong flows of money running from the real estate market to securities market, while this year, the real estate market has become hotter, drawing back investment.
In addition, the flat world securities market is also a hinder to the recovery of VN-Index as it affects foreign investors.-Enditem
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