The VN-Index plunged deeply last week, losing 5.65 per cent of its value over the course of five sessions to close on Friday at 429.14 points, despite two rising sessions at the end of the week.
The result marked the seventh week of declines in shares on the HCM City Stock Exchange in the last eight weeks.
Average daily trading volumes picked up slighly, however, rising by 12 per cent to 36.4 million shares, for an average daily value of VND892 billion (US$46.2 million).
About 95 per cent of codes posted losses over the course of the week, with such shares as Da Nang Construction Building Materials and Cement (DXV), DIC Investment and Trading (DIC), and Viet Nam Mechanisation Electrification & Construction (MCG) losing over 20 per cent of their value.
On the Ha Noi Stock Exchange last week, the HNX-Index plummeted by 10 per cent to close at 118.28 points – the lowest point for the index in 14 months.
The average value of trades also dropped by 8.6 per cent from the previous week to just VND648 billion ($33.6 million), although on a slightly increased average volume of 30 million shares per day, while over half of all codes on the Ha Noi market shed over 20 per cent of their value.
While foreign investors were net buyers on the HCM City bourse during the week – picking up nearly 4 million shares worth VND112 billion ($5.8 million) – they were net sellers on the Ha Noi bourse of VND26 billion ($1.3 million) worth of shares.
FPT Securities Company analyst Tran Quang Vinh trotted on the usual litany of reasons for the latest week's slump, including stricter capital requirements imposed on banks by the State Bank of Viet Nam, negative investor psychology, and the high pressure on securities companies to sell shares held as collateral for leveraged buys in earlier months.
"Many investors who borrowed to buy shares when the VN-Index was at around 480 have been required to sell once the Index fell to 430," Vinh said.
Broad declines on global stock markets further depressed investors, he added.
Vietstock analyst Nguyen Quang Minh said the possibility of a rebound remained out of reach even when market threats were diminishing. Many market insiders agreed that rising sessions on Thursday and Friday were only short-term corrections after a long decline and that the market remained in a downtrend.
Domestic economic indicators remained solid, however, with low inflation in the first eight months of the year, high disbursement of foreign investment and growth in industrial production, Minh said.
Saturday morning, the Domestic Market Management Team issued a report predicting that inflation nationwide was likely to remain under 8 per cent for the year, news that was expected to have some positive influence on the markets today.
This week, the two stock exchanges will only open for trading Monday through Wednesday and will be dark on Thursday and Friday for the September 2 holiday.