The attractive profit people have been getting from stock investments recently has prompted many people, including ones who know nothing of the ‘rules of the game’, to borrow money to ‘play’ with stocks.


The VN Index on June 2 rose sharply by 14.13 points (3.31 percent) to 440.56 points. The total trading volume of the market also increased significantly, reaching 52.8 million units, while the transaction value was 1,678 billion.


One and all rushing to purchase stocks


Just one month after making investments in stocks, Minh Hien in Tan Binh district in HCM City got the profit of 100 million dong. Though being an amateur, Hien was still brave enough to inject 500 million dong in stocks.


Hien related that she yesterday sold 2,000 stocks of a real estate company and got the profit of 15 million dong. As her business has been going smoothly, Hien has decided to borrow 200 million dong at the interest rate of 4 percent to make bigger investment deals.


Similarly, Dinh Lan, who left the stock market half a year ago due to the market’s falls, has returned to the market to surf investments instead of making long-term investments. Lan related that he has obtained the profit of 10 percent in the past 10 days.


The attractive profit many investors have got in recent days thanks to stock price increases has lured many more investors.


Khoa, an employee of a paint company, related that he has been trying to persuade his wife to take 100 million dong from their bank deposit to inject in stocks. Though his wife has not agreed to his plan, Khoa has drawn up a list of the share items he will invest in. “If business goes smoothly, I will give up my current job to become a professional investor,” he said.


T, a securities investor, who owes 10 billion dong due to the stock price falls in 2008, has decided to mortgage the house he is living in, worth 2 billion dong, to borrow money for securities investments. He hopes that he will be lucky enough to earn enough money when the stock market is rising to pay debts.


A lot of office employees, university students have decided to mortgage houses, motorbikes or borrow money to jump into the stock market.


Banks reserved


As many new securities investors have appeared, loaning to securities investors has become bustling business again.


Recently, VIS Securities Company, cooperating with Eximbank and Lien Viet Bank, announced a programme on funding securities investments. HD Bank said it plans to use 400 billion dong of the 900 billion dong reserved for consumer loaning to disburse for securities loaning.


While investors now prove to be very hot-blooded, lenders, who have learned lessons from last year, have become more reserved, according to Le Dat Chi from the HCM City Banking University.


Nowadays, the credit limit for loaning to securities investors is no more than 30-40 percent of shares’ market values instead of 70 percent as in 2007. Moreover, banks only accept share items with high liquidity for mortgaged assets, and only lend for short terms of 3-6 months.


General Director of ACB Bank Nguyen Thanh Toai said that funding securities deals is really risky so all banks keep strict control over this kind of loan.


Meanwhile, Trinh Minh Hoang from Analysis Division under Bao Viet Securities Company, said that it is risky to follow others to make investments in stocks, no matter whether investors use their own capital or borrow money.