Giddy investors, lured by tales of fabulous overnight
riches, helped drive Vietnam’s stock market to a record high last year
but now many have lost fortunes and maybe even their families.


The benchmark VN-Index, one of the worst performing
stock markets in Asia, dropped 59 percent between March 2007 and
September 2008. As a result of the stock market dive, business at most
of the country’s 98 stock broking firms has dwindled, according to the
Vietnam Association of Securities Business.


“I have lost more than US$30,000 on my original
investment,” said Bui Tri Dung as he placed a sell order with his eyes
fixed on the red figures of the electronic board of the Tan Viet
Securities brokerage. “I don’t know how I will explain it to my wife
because that was our family’s life savings.”


Like Dung, many people with only small amounts of
money – their savings or sometimes even loans - and limited knowledge
of the market rushed to invest in the stock market after it increased
more than five-fold between early 2006 and early 2007.


But since peaking at 1,170 points last March, the
VN-Index slipped as low as 366 points in late June. For months it was
the worst performing stock market in the world before rebounding to 483
points last month. The benchmark index closed Monday at 433.71, after
shedding 4.1 percent of its value during the day as investors reacted
to the global credit crises, which caused share market slumps around
the world Monday.


Earlier in the year, Vietnam’s benchmark index
plummeted as investors reacted to skyrocketing inflation and high world
oil prices. The share market started to rebound after the government
tightened monetary policies and more positive economic data emerged,
including a slowing in inflation, a narrower trade deficit and a fall
in global oil prices.


“Their dreams have been buried and their life savings
have vanished,” Southeast Asia Bank (SeABank) analyst Ha Anh Tung said
of some small-time investors. “Some investors have left the stock
market, while some others have become less interested in it.”


At a securities brokerage in Hanoi last Friday, a
group of young women discussed their losses, only occasionally glancing
at the stock prices on the electronic board.


Nearby, a middle-man in a worn check T-shirt moved up
and down the aisle, sometimes pausing to discuss the latest trading
activity with people jostling around a computer.


The man, who did not want to be named, stopped working
as a taxi driver to become a full-time investor. He pawned all his
family’s valuables in a mad craze to raise money for stock purchases
early last year. Now, he is facing the collapse of his family, as his
wife can’t stand the loss which has made their poor life more wretched.


Like this man, many amateur investors have been badly burnt by the stock market.


But others had a lucky escape, selling their stocks
before its swan-dive. Forty-year-old banking clerk Le Thu Huong is one
of the fortunate few.


“I sold all my 2,000 shares of two hydroelectricity
companies traded on the over-the-counter market in mid-2007 to buy a
car,” Huong said. “If I had held onto them until now, I would not be
able to find any buyers for them.”


In the current climate of global financial turmoil,
Huong does not intend to go back to the stock market. “Everything has
unpredictably changed. And I think there may be even more risks ahead,”
she said.


“The market is not good now. It depends on changes in
the world economy. If the US economy recovers or only slightly
decreases, the local stock market will remain at the current level or
slightly move up,” SeABank’s Tung said, forecasting the VN-Index will
be around 500 points later this year.


Investors are now more cautious. Their involvement in
the market is mainly short-term, Tung said, adding that some investors
sold en mass as soon as they saw prices falling.


In a move to boost the stock market, the State
Securities Commission recently widened the daily stock trading bands.
Individual stocks on the Ho Chi Minh Exchange can now gain or lose a
maxim of five percent in a day. At the Hanoi Securities Trading Center,
shares can gain or lose seven percent.


Earlier this year, the State Securities Commission
narrowed the band to 3 percent for the HCMC exchange and to 4 percent
for the Hanoi exchange to try to slow the fall of the markets.


Also in a move to decelerate the local bourse's
decline, the government has instructed credit institutions, which have
kept a large volume of shares of investors as collateral, not to sell
huge amounts of the mortgaged shares.


Some analysts and investors say it is now time for
investors to buy stocks, some of which are now at bargain-basement
prices after sliding for more than a year.


"In my opinion, the stock market has reached its
bottom, because market prices of many shares are now smaller than their
face value, even their book value," said Phan Van Quy, a 38-year-old
customer of the Hanoi Securities Company.


The government's drastic measures on curbing inflation and lessening trade deficit are proving effective, he added.


According to the Analysis Department of the Viet
Dragon Securities Corporation, shares of realty companies are likely to
recover by the end of this year when the most difficult time for realty
loans has passed.


“I hope the market will rebound this year, so that I
have opportunities to recoup part of my earlier losses,” said
30-year-old reporter Bui Minh Long.