The index on Vietnam’s fledgling stock market fell 21.07 points, or 5.7 percent, on Monday, bringing its decline since June 25 to 38.6 percent.
Analysts in Ho Chi Minh City, where the market is located, said the losses are the result of growing recognition among short-term speculators that Vietnam’s young stock market can no longer sustain the price gains experienced during its first year of trading.
During that year, prices rose almost every day as thousands of potential buyers tried to enter the tiny market. The market’s index reached a high of 571.04 points June 25 — five days after the first anniversary of the market’s launch on June 20, 2000, when the index stood at 100.
Recent regulatory efforts to rein in the unrealistic gains have successfully halted the increases by putting off some of the market’s largest short-term players.
However, long-term buyers are still active on the exchange and overall demand for the country’s limited number of stocks remains relatively strong, one analyst said.
Trade Monday was valued at 4.105 billion dong (US$274,619), a touch higher than Friday’s 3.771 billion dong (US$252,275).
The index fell 21.07 points Monday to 350.69 points after trade of 75,900 shares and 90 bonds, an official of the Securities Trading Center said.
The market’s newest issue, Saigon Hotel, bucked the market’s falling trend, closing 2,900 dong higher at 45,700 dong after trade of 26,700 shares.
The market has just six listed stocks and three government bonds — one of which has never traded — and two state-owned commercial banks.
In contrast to the early chaos of mainland China’s first stock market, Communist Vietnam has controlled trade by using tight daily price margins and, recently, buying restrictions. It has also imposed strict accounting rules on listed companies.