Overall speaking, the trend of VN-index in the last quarter was steadily decreased with some fluctuations ending the year at around 500 points from a peak of 568.99 at the beginning of October.
Under the provision of leverage instrument by almost all of stock companies from the middle of the year, the stock market went through a sharp increase to the highest peak at about 625 points in the mid of October. However, later on the inspection of the Stock Exchange Commission had forced all stock companies to stop their provision of leverage and marginal trading, which had caused a deep drop of the VN-index to 434.87 in the middle of December before gradually increasing toward the end of the year.
In addition, it‘s the information of macroeconomic conditions which contributes to the fail of the market. Firstly, the supporting of loan interest from the government partially made an effect on the index when a support of 4 per cent to enterprises for their loan demands was strongly expected but the lower level of 2 per cent was the official one. This influenced to revenue and profit after tax of all businesses; thus, price of stocks also dropped as well. Secondly, the restrictions of credit package and supply of money for the economy are other contributive factors. For the first nine months of the year, the amount supplied to the economy had exceeded the allowance of credit amplitude settled by the State Bank. Thus, to prevent the economy from a surge of inflation again, the government had to tighten the monetary policy by setting a basic interest at 8 per cent and this negatively influenced not only behaviors of investors in the stock market, but also the reduction of the market.
Despite the drastic drop from the beginning of the last quarter, the stock market did experience a medium increase in the last month to end the year at 494.77 points. This rise can be attributed to several reasons such as the tightened policies on the Gold Trading Floor, well-conditions of the macro-economy, and for the most important factor there was no leverage and marginal trading so investors were not afraid of selling stocks, in the case of falling of the stock market, to return loan payment to banks as before.
In 2009 although stock market did fall to a bottom at 234 points, but for the whole year the stock market still obtained a growth of over 49 per cent. This is the reason why the stock market still be expected to recover and shoot-up in 2010.
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About VIPC Capital Management Vietnam:
VIPC Capital Management or well-known as VIPC Fund Management is an independent national licensed investment fund built upon teamwork management and trustworthy pass relationships with investors. VIPC offers independent and institutional investors variety range of investment capabilities to match with hundreds of valued contact professionals and investment opportunities in one of the most attractive emerging markets, Vietnam in Real Estate, Securities and Private Equity.
Jessie Lan Vo
Sales& Marketing Officer
VIPC Capital Management
8 Nguyen Hue Street, District 1, Ho Chi Minh City, Vietnam
Tel: +84(8) 3827 7078
Fax: +84(8) 38277487