VietNamNet Bridge – The State Securities Commission (SSC) on May 8 affirmed that the trading bands on the two local stocks exchanges remain unchanged, denying rumors that the commission would revise the bands down to arrest further steep declines of the stock indexes.

Early last year, the trading band on the Hochiminh Stock Exchange was raised to 7% from the previous 5% while that on the Hanoi Stock Exchange rose to 10% from 7%. The new bands were in place until January 15 as part of market-boosting measures.

The rumors started circulating as the markets crashed due to a sell-off on May 8, promoting the SSC to ask investors to stay calm.

SSC chairman Vu Bang said that if the bands were adjusted whenever the indices drop, the market would not run normally. In fact, fluctuations on the market are normal and SSC will not intervene by adjusting the trading bands, he said.

Bang said that it was not easy to predict market trends in the future but investors should stay calm to make careful consideration. Foreigners are still disbursing money into the markets and there are no signs of capital outflows, so domestic investors should not worry too much, he said.

In a statement issued on May 8, the SSC said the macro economy had made positive changes since early this year. Listed enterprises reported improved business results in the first quarter.

The number of loss-making firms has dropped while foreign organizations have taken note of the nation’s economic recovery. Indirect investment capital in the first quarter almost doubled that in all of 2013 and foreigners have continued buying in recent days, the statement said.

Despite the strong index drop, liquidity on both bourses improved on May 8. Some large investment funds continued to pick up shares.

The SSC pointed to the East Sea tension between Vietnam and China as one of the causes of the free-fall on May 8 and urged investors to stay cautious to make proper investment decisions.  

Vietnam stock market remains attractive – experts

Securities experts on May 8 advised investors to stay on the stock market now to cash in on earnings from this investment channel.

Speaking at a press briefing on the Vietnam Investment Forum 2014 on May 8, Vincent Nguyen, general director of HVS Securities Company, said the local market’s price-to-earning (P/E) ratio was the lowest in region, making it an attractive investment destination.

Investment advisor Marc Faber has mentioned Vietnam a lot. He and related funds were investing around US$800 million in the Vietnamese market, he said.

Nguyen Son, head of the State Securities Commission’s (SSC) Market Development Department, said the SSC was improving the legal framework to spur the market. The agency will also introduce exchange traded funds (ETFs) in the coming time.

The Government has approved a project to develop a State-controlled centralized derivatives market, which will begin operating in late 2015 and follow international technical standards. Stock shorting rules and the Securities Law would also be re-considered, facilitating transactions on the market, Son said.

Marc Faber will be the keynote speaker at the Vietnam Investment Forum 2014, which is scheduled to take place on June 19 in HCMC. The event is co-organized by Vietnam Investment Review, Malaysian-owned HVS Vietnam Securities Company and Hong Kong-based Asia Frontier Capital (AFC).

Source: SGT