“Only a miracle can save me now,” says Hoang Nam, who has seen his investment go down by 34 percent in two weeks.
Nam bought stocks of seafood producer International Development & Investment Corp at the end of November after they surged nearly 250 percent that month.
But on the last day of the month the stock started losing and fell for eight sessions, hitting the floor on most days. “It has been a costly lesson”.
He is among many inexperienced retail traders who have become victims of the huge volatility that has gripped the markets.
A Facebook group called ‘LIC – the gift from God’ was formed at the end of last month as the LIC ticker of construction firm Licogi Corp went past the VND100,000 ($4.35) mark for the first time after surging 570 percent in less than three weeks.
Traded on the Unlisted Public Company Market (UPCoM) with a daily price band of 15 percent, it has been an ‘unknown’ stock since being listed in 2017.
It languished below its face value of VND10,000 for the last four years.
But in early November it began to rise relentlessly reaching VND146,700 by month end, higher than the shares of blue chips like Vingroup and Vietcombank.
Members of the Facebook group kept saying this “gift from God” would be a huge miss for anyone who does not own it.
LIC of Licogi Corp. Photo courtesy of TradingView
However, like other speculative stocks, LIC started to lose on Dec. 1 and has lost for six straight days since. It is now 60 percent from the peak.
Many other penny stocks have also been extremely volatile as investors look for quick gains.
SJF of agricultural firm Sunstar Investment Jsc surged 240 percent in the second and third weeks of November before plunging by half in the next two weeks.
There are no fundamental reasons for their gains.
Construction company Song Da, for instance, has been surging in the last few weeks though there has been no change in its earnings.
Even stocks whose trading is restricted due to financial concerns are surging.
Tickers like PVX of Petro Vietnam Construction Jsc and SGO of Saigon Vegetable Oil have been hitting the ceiling though their trading is limited to once a week.
Nguyen The Minh, director of analysis at brokerage Yuanta, said most of these stocks have risen because speculators want to make a quick profit.
Some real estate stocks, however, are brought because investors expect a recovery next year despite a poor fourth quarter, he added.
Vietnam’s benchmark VN-Index reached 1,463.54 points Friday.
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