Stocks collapse on worries about system failure
Stocks collapse on worries about system failure
Vietnamese shares tumbled on Thursday as worries about the trading system triggered a market-wide sell-off, bringing local assets to cheaper prices.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange lost 1.05 per cent to 1,067.52 points. The index was down 0.42 per cent on Wednesday.
The decline was much worse during the day as the VN-Index plunged as much as 2.97 per cent – the worst since October 28 – to 1,046.89 points.
The collapse occurred after the index rose to near 1,085 points in the early stage of the day.
Investors began to offload their assets at any prices to preserve their profits on worries the market would be suspended again after being overloaded by the increase of trading orders.
The Ho Chi Minh Stock Exchange’s trading system had been suspended on December 17, 22 and 23 after the trading value surpassed VND13-14 trillion during the day.
The incident happened again on Thursday as the system broke down in the early minutes of the afternoon session when trading value reached VND14 trillion.
Investors were unable to sell assets anymore and any attempts to buy in cheap stocks were also impossible.
In a number of mutual groups created by brokers for investors, the advice was “cash is king”. There were concerns that the southern bourse might have “unplugged” the market as it is often done in developed markets like the US.
On Wednesday afternoon, HoSE’s chairman Le Hai Tra told reporters that it was not the bourse’s fault and the technicians were working to find out the real trouble.
Securities firms on Thursday declined to comment on the market failure.
On the southern bourse, the large-cap tracker VN30-Index had lost as much as 3.04 per cent before rebounding and closing the day down 1.12 per cent at 1,033.95 points.
Twenty-six of the 30 largest stocks by market capitalisation and trading liquidity were brought down while only two increased.
Among the large-cap decliners were lenders HDBank (HDB), (SBT), Eximbank (EIB), Techcombank (TCB), Bank for Investment and Development of Viet Nam (BID), dairy producer Vinamilk (VNM) and Vinhomes (VHM).
BID, VHM, VNM and TCB were four of the 10 large-cap stocks that weighed on the market on Thursday.
The mid-cap and small-cap tracker VNMID and VNSML indices dropped 1.03 per cent and 1.83 per cent, respectively.
The market breadth was negative as the number of declining stocks four-folded that of gainers by 367 to 88.
On the Ha Noi Stock Exchange, the HNX-Index dived 1.38 per cent to 187.63 points.
The northern market index had gained a total of 28.8 per cent in 17 consecutive trading days since December 1.
More than 909 million shares were traded on the two bourses, worth VND15.95 trillion.
