Stock Markets

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Just as the market was prospecting a more sustainable recovery, the global
financial crisis began to explode. A look at the overview of Vietnam's stock market
before, during and after the global financial crisis occurred From February
onwards, the stock market began to be directly affected by excessive leverage
during the period of easy credit

Panic begins

For the first time, investors are widely aware of technical selling pressure from
mortgage settlement rather than from conventional risk aversion. The "snowball"
effect has created an unforgettable obsession for those who go through this period,
when every morning opening the trading board, millions of shares are sold by
securities companies at floor prices. No amount of resources can stop this
unprecedented sale The peak of panic began with disruptive expressions of
investorsThis is also the first time that the influence of the stock market on life has
been most clearly revealedThe climax is that many investors flocked to the State
Securities Commission on March 5 to "express their anger". The writer of this
article was fortunate to witness the hordes of investors Four cars, taxis crowded
into the hall to demand to "confrontation" with the regulator. Earlier, this group of
investors also rushed to the Hanoi Stock Exchange Center

With the aim of stopping the decline of the market, the stock market regulator has
also implemented a number of measures. First of all, on March 27, the price
fluctuation range of HSX was lowered from +/-5% to +/-1%, at HNX was lowered
from +/-10% to +/- 2% of the State Capital Investment and Business Corporation
(SCIC) was allowed to participate in buying stable shares. Commercial banks,
securities companies are lobbied to stop disbursementListed companies are called
to buy treasury sharesThese solutions brought 10 bullish sessions and from April
10, the market fell into a downward cycle, which lasted until June 13. VN-Index is
now only 370.55 points. Thus, in just over the first 6 months of the year, VN-Index
has decreased by over 60% compared to the end of the year. In 103 trading
sessions of this period, there were 71 sessions where VN-Index declined. The
culmination was a series of 34 consecutive sessions of declines from mid-April to
early JuneThe aforementioned support measures are short-term and have a direct
impact on daily market activity

Turning point
With the strongest correction in the global market in the first half of the year,
Vietnam's stock market found balance in July and August. There has been a joint
effort to save the market of large institutions and the above two months are a
period of "healing" for investors. VN-Index recovered from 370.55 points to
561.85 points on August 27. The positive movements in the stock market this time
also reflect expectations for the economy. Government intervention and measures
to curb inflation have begun to work. CPI fell rapidly, the monthly trade deficit
also decreased. The market also saw contradictory investment activity between
domestic and foreign investors in the first half of the year. When mortgage
settlement activities took place massively, the market dropped sharply, domestic
investors sold off, foreign investors still disbursed funds very steadily. HSX alone

From January to the end of August, foreign investors bought shares of over VND
16.1 trillion, sold more than VND 9 trillion, equivalent to a net buying value of
nearly VND 7,100 billion. July 7-8 is also a time when the market is relatively
optimistic, confidence is said to have returned. Foreign investors continue to buy
strongly, many foreign organizations register to buy large volumes of securities,
stock prices on the market increase for a long time. The stock market is ahead of
macro movements. However, just as the market was promising a more sustainable
recovery, the global financial crisis began to explode, with the bankruptcy of US
investment bank Lehman Brothers on September 15, as a final knockout to the
market. September 15th was not a terrifying day for Vietnam's stock market

Perhaps the ability to assess the impact of this event is limited. It was still an
upward session of VN-Index, about 0.2%, and foreign investors net sold VND
106.6 billion on HSX. The absolute selling figure is about VND 188.5 billion,
accounting for 18% of the total value of the exchange. But it was not until
September 16, when the domestic media began to massively publish information
about Lehman's bankruptcy, combined with a sharp decline in the international
market, that the Vietnamese market really adjusted greatly. The VN-Index lost
about 4.4% (20.81 points) that day and in many tickers, investors were unable to
get out anymore. The market continued two sessions of deep declines of over 4%
through September 18.