Stock investors indifferent to bottom fishing

After the VN-Index closed last year around 900 points, Hai, 36, sold most of his portfolio and put the funds in a bank for a six-month deposit.

With a little more than VND300 million ($12,669) “stuck” in a property developer that has been delisted, Hai now barely pays attention to the market.

“Stock brokers send me text messages every once in a while urging me to buy this ticker or that ticker,” Hai told VnExpress, “but I am no longer interested as a sideways market does not guarantee more profit than bank profits.”

Hai is only one of many investors who have turned indifferent towards the stock market.

Le Vu Kim Tinh, a branch director of Phu Hung Securities, said that amid the lack of both positive and negative information, many investors have decided to stay out of market developments as they do not have enough data to make decisions.

Vietnam’s main bourse Ho Chi Minh Stock Exchange (HoSE) has recorded only one trading day with over VND10 trillion in trade value in the last two weeks, while the number of sessions with VND7 trillion or less – nearly one-fifth of a peak session last year – is increasing.

Last month when the VN-Index bounced back after a five-session decline, investors decided to keep their money safe in their pockets as HoSE then recorded a trading day of less than VND6.5 trillion, lowest since October 2020.

Earlier this week, analysts expected that a new government decree allowing businesses to extend bond repayments by two years would help boost stock investment, but trade on Monday only reached VND6.8 trillion.

“Many new investors in recent years have become more experienced and are waiting and observing carefully before making a purchase decision,” Tinh said.

He added that when the market rises investors are not hasty to buy, and when it drops they do not sell due to fear of losses. They have instead chosen to wait.

Broker Thuy Tien said that is has become much more difficult for her to convince customers to buy in recent days.

When she told an investor that a bank stock price had dropped to VND15,000 and it was the right time to buy, he said “I’ll see to it when it hits VND13,000.”

Tien added: “We brokers are struggling to meet our targets as very few investors are buying.”

The dampened market has also discouraged new investors. The number of new stock accounts in February was 64,000, compared to the peak of 476,000 a month last year.

Analysts at brokerage VNDirect said that higher deposit interest rates at banks have also prompted many investors to open savings accounts instead of putting money in the stock market.

The average 12-month deposit rate is now at 7.8%, and some banks offer up to 9.5%.

“Stocks do not seem to be an attractive investment channel compared to bank deposits, which will not likely plunge this year as inflation and currency exchange pressures remain,” VNDirect analysts said in a report.
Nguyen Thanh Cong, head of analysis at Thanh Cong Securities, said that it is difficult to predict when investors will return to the market.

Tinh from Phu Hung Securities said that stocks remain the most liquid asset aside from cash and therefore trading will jump up quickly as soon as supporting news arrives.