Stocks with market prices below 10,000 VND/share are important investment channels for many investors, especially those who have little capital or want to try “thrills”.
In a recent dispatch sent to the Ministry of Finance, the Vietnam Association of Financial Investors (VAFI) said that on the Ho Chi Minh Stock Exchange (HOSE) there are currently poor quality stocks, which are manipulate, price. These stocks cause damage to tens of thousands of investors, especially those who are not knowledgeable about securities.
VAFI did not name any specific stocks, but said that: There is a situation of junk shares priced at less than 10,000 VND/share, but business owners still make many new issuances of shares equal to par value in the style of “selling paper” take real money” to earn trillions of dong.
Of course, whether the price is above or below 10,000 VND/share is just one of many characteristics and it is not possible to rely solely on the unit price to determine what is a “junk” and “gold” stock. VAFI also recommended the Ministry of Finance to carry out a comprehensive inspection to remove poor quality stocks.
According to our statistics, on the Vietnamese stock market, there are currently 595 stocks with price below 10,000 VND/share, mainly in UPCoM market with 399 stocks. HOSE and HNX had 70 and 126 codes below par value, respectively.
The total number of outstanding shares of the group below par value is more than 18.9 billion units, equivalent to over 11% of the whole market.
In the context that all exchanges apply a minimum even lot of 100 units in trading, low-priced stocks are an affordable option for retail investors who invest with their monthly savings.
Low-priced stocks are also relatively small-caps. Specifically, the price group below 10K has an average market capitalization of nearly 190 billion VND/share, while the price group of 10K and above has an average listing value of more than 6,000 billion VND/share.
If looking at HOSE alone, the corresponding figures of the two groups are 700 billion and 15,500 billion.
Because of their small capitalization, low-priced stocks are easily influenced by a small number of investors. Just a few orders with a value of tens of billions of dong can push the stock price up or down, creating shock sessions or deep declines.
Meanwhile, wanting to significantly impact the price of bluechip stocks such as VIC (Vingroup), TCB (Techcombank) or HPG (Hoa Phat) requires money that can reach trillions of dong and not many people have the potential to do it.
Therefore, investors who pour money into low-priced stocks (with small-caps attached) should prepare their minds for sessions of strong volatility, ceiling or floor relatively often.
In terms of trading volume, stocks priced below 10K contributed nearly 21% of the market liquidity with about 210 million units changed hands in the session 11/6. The lowest rate is 15.4% at HOSE and the highest is 39.3% at UPCoM.
Because of the low unit price and small capitalization, the proportion of trading value of these stocks is not high. Although accounting for 21% of trading volume, the value was only about 3.5%, equivalent to more than 1,000 billion dong in the session of 11/6.
Source: vietnambiz.vn – Translated by fintel.vn