VNStockNews.com - Investors are losing confidence in Vietnam stock market as almost all investors, both individual and institutional, local and foreign, are losers in the play, Hai Ly, an analyst with Lao Dong, a local state-run newspaper raised concern.
Bui Nguyen Hoan, head of State Securities Commission in Ho Chi Minh City, one of the founders of capital market in Vietam, bitterly said “ Vietnam stock market is like an abandoned child”, Ly quoted the official as saying.
Meanwhile, Nguyen Vu Quang Trung, deputy general director of Hanoi Stock Exchange uttered a concern “ The question for regulators is do they want to develop the economy on two feet: Stock market and banks, or banks are only source of capital while stock market is a decoration for the economy?”
Vietnam stock market is one of the world‘s worst performers
As of July 29, VN Index lost 89.07 points or 18% while HNX Index was worse, losing 44.69 points or 39.1%, StoxPlus’ data showed.
The concept of “cheap- expensive” share prices lost its meaning and technical analysts are having headache as Vietnam share prices kept breaking record lows with no light in the end of the tunnel.
Worse still, Vietnam stock market is facing the threat of foreign funds’ closure in the following year, the analyst pointed out. He estimated the mark-to-market value of these funds’ holding at $3 billion, a quite big number and the economy will be impacted by their divestment if any.
Another question remained: how will Vietnam stock market attract more FII when the confidence in the market is eroded?
Who to blame?
People blame the stock market’s doom for macro economy uncertainty, regulators- State Securities Commission and the Ministry of Finance for their inactiveness in issuing policies to stabilize and promote the market in the past 2-3 years, their ineffectiveness in coping with stock price manipulation, rumors, information distortion and speculation. The market watchdog also failed to stop illegal short-selling in recent years.
The analyst also blamed monetary policy for the stock market poor performance pointing out two price system for dollar and the failure of interest rate cap. Ly cited out that deposit interest rates are capped at 14% but the Ministry of Planning and Investment had to amid the average deposit interest rates at 15.5% p.a.
It is time for Vietnam to treat the stock market as a key capital channel and there should be mechanism to recognize its importance.
Ly criticized the State Bank of Vietnam’s grouping securities into “non-production” which leads to a misleading behavior of treating stock market as an abandoned child in comparison with banking system.
