|Brokers in EAB Securities Company receiving stock orders by phone. (Photo: T.C)|
Viet Nam’s stocks have changed direction faster than ever. After a hot booming, stocks fell non-stop in the last 4 sessions.
In the May 8 trading session, there was still some buying strength from investors although all of the 36 stocks and fund certificates slid. However, the market dropped even further on May 9 as 35 stocks and fund certificates went straight to floor prices with non-buying orders.
VN-Index saw an astonishing decrease of a 4-year-drop of 27.85 points within one session. Therefore, within 4 consecutive sessions of tumbling, VN-Index has totally lost 65.71 points (10.73%), closing at 546.4 points.
What has made the recent downturn of stocks?
When the market gets hot, no supply can keep up.
When shares were just slightly weakened, the sales of stocks imposed even a stronger pressure on the drop?
There is no balance between supply and demand.
As observed on many trading floors of securities companies, many new investors anxiously placed selling orders since they saw a drop of stocks. This caused shares even to fall further down because of the bandwagon effect.
Meanwhile, institutions and seasonal investors did not panic as they trust the potential and long term growth of the market with many positive elements to rely on. This is also a great opportunity for them to own more shares.
Statistics of the May 9 trading session shows that foreign investors sold out only VND 400 million worth of shares and bought in more than 210 million of shares with the total value of VND 19 billion.
When the market was hot, warnings from the press and regulators were ignored. So when the prices got adjusted, investors should assess their stocks value on trust or they will be exposed to many additional risks.
This also raises the urgent need for investors’ education.