This is only the second time this year that the market has fallen so low.

Following slight gains late last week, HCMC stocks opened the third quarter by tumbling 30.51 points, or 2.98 percent, to close at 994.17 – the lowest point in the last two months. Hanoi’s HASTC-Index sunk 28.4 points to close at 256.3.

Of the 107 stocks listed in HCMC, 96 dropped while only four gained.

However, both trading volume and turnover were up, 42 and 25 percent respectively, to 5.7 million shares and VND577 billion (US$39 million).

The first listed bank, Sacombank became was Monday’s most traded stock with 850,000 shares exchanged despite a multi day fall while FPT’s VND89 billion in turnover led the market.

The drop

Investors rushing to sell threw many shares into nosedives, several of which hit the floor.

Hanoi-based infrastructure developer SJS tumbled by the 5 percent cap to close at VND300,000.

All blue chips on the market lost. The exchange’s two largest stocks, PPC and STB,  took sharp 3.9 and 3.8 percent hits respectively to close at VND61,500 and VND63,500.

Market analysts attributed the massive discharge to a recently released study of the local stock market by Hongkong Shanghai Banking Corporation (HSBC).

HSBC’s research forecast that Vietnam’s main share index would dip below 900 points later this year.

The study said most fund investment managers would move their capital from listed stocks to forthcoming initial public offering by big corporations.

The banking group’s forecasts countered local experts who predicted that the VN-Index could hit a fresh record of 1,300 by the year end.

Foreign investors increased their buys Monday, investing VND252 billion in 1.6 million shares mainly FPT, PVD, PPC, VSH and VFMVF1 among others.

The two mutual funds, PRUBF1 and VFMVF1, shed by 4.8 percent and 4.3 percent respectively to VND11,800 and VND31,000.

Hanoi saw 1.2 million shares change hands for VND127 billion.

More newcomers

The HCMC Securities Trading Center (HoSTC) said it has just received listing applications from seven joint stock companies, three of which submitted to list particularly large volumes of shares

The VND320 billion Vietnam Electricity Construction Corp. applied to list 32 million shares while the VND300 billion Tay Ninh Rubber Joint Stock Company plans to list 30 million shares and PetroVietnam Tourism Service Company asked to list nearly 26 million shares.

Thuan An Wood Processing Company, Thong Nhat Rubber Company, Ba Ria –Vung Tau Housing Development Company and Hoang Gia International Company have also applied to list on the southern exchange.

HoSTC – Asia’s hottest stock market last year - is home to 107 listed stocks, two mutual funds and 40 brokerage firms with a total market capitalization of $15.3 billion.

The stock market capitalization is forecast to hit $30-40 billion by 2010, accounting for between 30 and 40 percent of the country’s gross domestic product (GDP), according to State Securities Commission.

Source: Thanh Nien, VietnamNet  – Compiled by Dong Ha