Stock losses widen amid market fluctuations

Thai in Ho Chi Minh City invested nearly VND200 million ($8,465) in Nam Kim Steel stocks (NKG) at the end of November when its price was at around VND9,000 a share. He sold his shares two weeks later, earning a nearly 25% profit.

The gain encouraged him to buy more shares and two weeks ago he poured over VND500 million into the stock using leverage during a session when it surged to a ceiling price of VND14,100 per share.

NKG, however, started to retreat last Wednesday, falling to VND12,000 per share as of Monday morning, down 18% over the past four trading sessions.

“I used leverage and was going to sell quickly to compensate for the mid-year loss, but it seems I will not have a happy holiday,” he said, adding that his investment has now lost more than VND150 million.

Another investor, Thuy, lost more than VND100 million in a week after buying shares of Tan Tao Investment and Industry Corp. (ITA) last Tuesday at VND4,900 per share. She had expected her investment would double as it had during the last two weeks of November.

Instead, the stock plunged and Thuy saw her investment retreat by 16%.

Le Vu Kim Tinh, director of the Tan Binh branch of Phu Hung Securities in Ho Chi Minh City said that many investors have been trying to make up for losses that have been building up this year as the market dipped after rising for two years.

These include big investors with a net asset value of over VND10 billion, he added.

“Investors seem to be simplifying existing risks on the stock market and they seem to believe that their investment will surge several times more within a blink,” said Tinh.

Vietnam’s benchmark VN-Index went through a year of turbulence. It started 2022 by reaching a new record 1,528 points in January before diving to 911 points in mid-November, with geopolitical tensions, inflation, tightened credit and alleged bond fraud dragging down investor sentiment.

As the index was among the world’s worst performers at certain times in the third quarter, many investors have been buying more shares in the hope of a recovery. Foreign investors have been net buying for six weeks, and trading volume on December 16 reached a 12-month high.

But Nguyen Duy Anh, head of the asset management office under Vietcombank Fund Management, said that the quick recovery of the VN-Index in recent weeks could encourage many punters to invest in the market again due to the fear of missing out on an expected boom.

Foreign investor sentiment has been weakening in recent sessions, showing that the recovery of the VN-Index remains slow and that investors should be watchful in their decisions at this time, Anh said.

“It could take a few months or half a year for clear recovery signs,” he said

Anh added that investors should ignore the short-term fluctuations of the market and instead look for businesses with sustainable growth thanks to their strong development strategy and management.

He added that investors should refrain from using leverage for the time being.