The stock market has experienced four falling trading
sessions so far this month. Meanwhile, experts say that there are signs
of further falls in the time to come, and that there is only a 10%
chance of the recovery of stock prices this year.


Investors watching the world’s markets


It is clear that the uncertainties in the world’s
financial market and US economy have been making Vietnamese investors
uncomfortable.


Lam Minh Chanh, Director of Dai Viet Securities
Company, said that Vietnam, as a part of the world, will not remain
untouched by the global financial market crisis.


Meanwhile, the director of an investment fund has
warned that the business results of listed companies in the third and
fourth quarters of the year will not be satisfactory and also be a
barrier for the recovery of the VN Index in the last months of the year.


Le Dat Chi, a lecturer in the Faculty of Corporate
Finance, HCM City Economics University, said that the securities
indexes of the markets in the world have been sliding after bad news
from the US and then Europe. He said the global economy will continue
to be gloomy.


Chi said that the macroeconomy in Vietnam remains
unsatisfactory despite the good news about the consumer price index
(CPI), trade deficit and money supply. The worries about listed
companies’ business results will badly affect share items which have
big capitalisation volumes.


“Technical analysis shows that there is a 10%
possibility of stock prices recovering. If stock prices do not bounce
back on October 8, prices will fall further to a new threshold of 360
points,” he said.


In the latest news, the VN Index on October 8 dropped by another 12.91 points to 401.33 points, the deepest low since July 2008.


However, Chi said that the current stock prices are
considered very cheap, and should prompt investors to buy stocks. A
higher demand would help the stock market bounce back.


The analysis director of a securities company said
that with the everyday trading volume of less than VND800bil it will be
very difficult to push the market up. The director also said that the
high P/E is really an obstacle for the recovery of the VN Index in the
short term. He went on to say that there will not be optimistic signs
for the stock market until mid 2009 when the economy becomes stable.


Chanh from Dai Viet Securities Company said that the
VN Index will depend on investors. Investors believe that the business
results of listed companies are unsatisfactory. Therefore, the only
thing that could change their minds now is the increased performances
of the world’s stock markets.


No intervention needed


Though experts have given pessimistic forecasts about
the world’s and Vietnam’s stock markets in the time to come, they say
that no intervention from the government should be made at this moment.


Chi said that administrative orders should not be
abused, and that it is necessary to let the market follow economic laws
and truly reflect its value.


Vu Bang, Chairman of the State Securities Commission
(SSC), said that the watchdog has not made any plans to interfere in
the market at this moment.


“SSC is still keeping close watch over the market and
it will consider taking necessary measures only if the VN Index nearly
falls to the previous low of 366 points,” Bang said.


Bang added that if the VN Index remains around 400
points, this should be understood as the market being stable. The state
management agency will take actions only if it sees wide-scale sales
and serious problems in liquidity.