BTA
19-06-2008, 10:48 AM
The decision by the State Securities Commission (SSC) to raise
the daily trading band by 1% on both Hanoi and HCM City bourses has
been applauded by some investors, but not those who fear it will result
in sharper falls of the stock market.[/i]
[/i]
http://english.vietnamnet.vn/dataimages/200806/original/images1574060_s.jpg" height="150" width="200 (http://english.vietnamnet.vn/dataimages/200806/original/images1574060_s.jpg)
With
the decision, the daily trading band for the Hanoi Securities Trading
Centre (HASTC) will be +/-4%, while the band for the HCM City Stock
Exchange (HOSE) will be +/-3%.
Huy Nam,
a securities expert, said that he once called for the resumption of the
initially applied trading band of 10% and 5%, respectively.
“The
modest widening shows that SSC is still too cautious with its moves.
Wider trading bands bring more good things to the market,” Nam said.
However, Nam
added that the decision, in any case, is a good thing for the market.
But widening the trading band is just a short-term measure. In the
long-term, the stock market needs more than just a wide trading band.
“Wider
trading bands will allow stock prices to fall down more sharply or go
up more sharply, but this will certainly help improve the liquidity of
stocks,” Nam said, adding that more transactions will make the market more bustling.
He
said that the low liquidity, which was caused by the measures to
tighten the market, was one of the reasons that investors have left the
market.
Those investors may return to the market when they hear that the liquidity has been improved.
However,
he stressed that widening the trading band only can help invite
investors to the market. There still needs to be more actions taken to
revive the ailing stock market.
Meanwhile,
Tran Huy Duong, Analysis Director of Hoa Binh Securities Company, has
expressed his concern that the move by SSC may cause the market to fall
more sharply.
Duong
said that SSC seemed to be hasty to widen the trading band when the
market saw 4-5 trading sessions of increasing. He believes that it is
not the right time now to widen the daily trading band, as the market
still has a lot of uncertainties.
The
wider trading bands will encourage investors to make deals. If they
make bank deposits, they will get the maximum profit of 18% per annum,
while if they make securities investments, they can get the profit of
3-4% every day. A lot of investors who once suffered losses may come
back to the market.
However, Duong can see problems in the SSC’s move.
“We
well know that some institutions which hold mortgaged stocks may push
up the sale of the mortgaged stocks once the daily trading band
increases, which would certainly cause troubles for the market,” Duong
said
Duong
anticipates that the stock market will see the market prosper for some
4-5 trading sessions after June 19 (the day when the decision on
widening the trade band becomes effective). However, the market may go
down after that, as the investors who bought shares at low prices
before may sell then.
However, Duong agrees with Huy Nam: the market needs long-term measures rather than just a short-term trading band widening.
the daily trading band by 1% on both Hanoi and HCM City bourses has
been applauded by some investors, but not those who fear it will result
in sharper falls of the stock market.[/i]
[/i]
http://english.vietnamnet.vn/dataimages/200806/original/images1574060_s.jpg" height="150" width="200 (http://english.vietnamnet.vn/dataimages/200806/original/images1574060_s.jpg)
With
the decision, the daily trading band for the Hanoi Securities Trading
Centre (HASTC) will be +/-4%, while the band for the HCM City Stock
Exchange (HOSE) will be +/-3%.
Huy Nam,
a securities expert, said that he once called for the resumption of the
initially applied trading band of 10% and 5%, respectively.
“The
modest widening shows that SSC is still too cautious with its moves.
Wider trading bands bring more good things to the market,” Nam said.
However, Nam
added that the decision, in any case, is a good thing for the market.
But widening the trading band is just a short-term measure. In the
long-term, the stock market needs more than just a wide trading band.
“Wider
trading bands will allow stock prices to fall down more sharply or go
up more sharply, but this will certainly help improve the liquidity of
stocks,” Nam said, adding that more transactions will make the market more bustling.
He
said that the low liquidity, which was caused by the measures to
tighten the market, was one of the reasons that investors have left the
market.
Those investors may return to the market when they hear that the liquidity has been improved.
However,
he stressed that widening the trading band only can help invite
investors to the market. There still needs to be more actions taken to
revive the ailing stock market.
Meanwhile,
Tran Huy Duong, Analysis Director of Hoa Binh Securities Company, has
expressed his concern that the move by SSC may cause the market to fall
more sharply.
Duong
said that SSC seemed to be hasty to widen the trading band when the
market saw 4-5 trading sessions of increasing. He believes that it is
not the right time now to widen the daily trading band, as the market
still has a lot of uncertainties.
The
wider trading bands will encourage investors to make deals. If they
make bank deposits, they will get the maximum profit of 18% per annum,
while if they make securities investments, they can get the profit of
3-4% every day. A lot of investors who once suffered losses may come
back to the market.
However, Duong can see problems in the SSC’s move.
“We
well know that some institutions which hold mortgaged stocks may push
up the sale of the mortgaged stocks once the daily trading band
increases, which would certainly cause troubles for the market,” Duong
said
Duong
anticipates that the stock market will see the market prosper for some
4-5 trading sessions after June 19 (the day when the decision on
widening the trade band becomes effective). However, the market may go
down after that, as the investors who bought shares at low prices
before may sell then.
However, Duong agrees with Huy Nam: the market needs long-term measures rather than just a short-term trading band widening.