Scandal keeps eroding shares

Scandal keeps eroding shares

Shares continued to tumble again August 27 on the nation's stock exchanges in the wake of last week's arrests of two major banking tycoons under investigation for financial fraud, reversing a small correction last Friday precipitated by bargain-hunting investors.

Source: VietstockFinance

"Friday's buoyancy was dampened back down by renewed sell-offs brought on by continued fears of the impact of the bankers' arrests and grim economic data," wrote FPT Securities Co analysts on the company's website.

The return of high inflation after two deflationary months had added to investor concerns over corporate earnings, they added.

On the HCM City Stock Exchange yesterday, the VN-Index lost another 3.38 per cent of its value yesterday to close at 386.19 points. The value of trades fell to just VND645.2 billion (US$30.7 million), about half of Friday's level, on a volume of 42.3 million shares.

Slumping blue chips led the market downturn. Twenty-eight of the 30 leading shares by market capitalisation and liquidity declined, most dropping to their floor prices, including insurer Bao Viet Holdings (BVH), property developer Hoang Anh Gia Lai (HAG), steelmaker Hoa Phat Group (HPG), PetroVietnam Finance (PVF) and financial conglomerate Ocean Group. The VN30 Index therefore fell 3.48 per cent to end the session at 456.32 points.

Military Bank (MBB) was the most-active share with nearly 3.3 million changing hands before it closed off by 3.6 per cent to VND13,400 per share.

On the Ha Noi Stock Exchange, the HNX-Index plummeted by another 4.44 per cent to close at just 60.31. The value of trades dropped 46 per cent from Friday's level to VND320.4 billion ($15.3 million), while volume decreased 53 per cent to only 35 million shares.

The HNX30 Index – tracking the exchange's 30 leading shares – gave up 5.4 per cent to conclude the session at 111.93 points.

VNDirect Securities Co (VND) became the most-active share on total trades of 4.8 million shares but dropped to its floor price of VND9,400.

Foreign investors continued to look for bargains, becoming net buyers on both exchanges and picking up shares worth a combined net of VND28.3 billion ($1.3 million). Since last week's fraud scandal broke, foreign investors have continued to buy up shares, picking up a net of VND343 billion ($16.3 million) worth of shares last week.

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