Since last weekend, along with strict control on the Covid-19 pandemic, the Government launched several measures on welfare benefits and business support, helping the stock market to rebound strongly, jumping 22.5 points on April 3 and rocketing by nearly 35 points on April 6.
Last weekend, the stock market was covered by negative information, especially the situation of mortgage lien release, including real estate stocks. Firstly, on March 23, HDB Securities Company announced it would lift the mortgage of 3 million ROS shares of Mr. Trinh Van Quyet from March 24. Right after the announcement, FLC Group said that money had been added to the brokerage account of Mr. Trinh Van Quyet. Therefore, HDB Securities Company terminated the mortgage lien release on ROS shares.
However, information about mortgage lien release still massively appeared at the end of March when the market plummeted continuously. On March 30, Hoa Phat Joint Stock Company denied the information that the Bank for Foreign Trade of Vietnam (Vietcombank) sold 100 million shares of HPG mortgaged by Mr. Tran Dinh Long, Chairman of the Board of Directors of Hoa Phat Group. Accordingly, the medium and long term contract between Hoa Phat Group and Vietcombank already had collateral. The mortgage of 100 million shares of Mr. Tran Dinh Long was to supplement collateral for the loan instead of using these 100 million shares to buy shares. Therefore, there is no selling when the stock price goes down. At the same time, the company also recommended that its shareholders need to directly contact the representative of the company for any information to minimize losses for shareholders as there is much false information.
Yuanta Securities Company announced the lien release of 3.15 million shares of Mr. Le Viet Hai, Chairman of the Board of Directors cum CEO of Hoa Binh Construction Joint Stock Company (HBC) from March 31. Then, on April 1, Yuanta canceled the mortgagee sale as Mr. Hai already finished his additional margin obligation.
Since the beginning of this year to last weekend, the market price of HBC fell by more than 36 percent, from above VND10,600 per share to VND6,420 per share, the lowest level in the past four years. Besides, Mirae Asset Securities also announced to sell more than 2.5 million shares of LDG mortgaged by Mr. Nguyen Khanh Hung, Chairman of the Board of Directors of LDG Investment Joint Stock Company from March 31.
According to securities expert Tran Binh, the wave of mortgagee sales increases as the market value per share is below the price that investors mortgaged to financial institutions. When share value drops below the limit, investors do not add more money to keep the price, forcing the mortgage holders to make mortgagee sales to recover loan amounts. The recent robust recoveries showed that large cash flow has been ready for bottom-fishing anytime if there is positive news.
As for the real estate sector, positive news continuously appeared. On April 3, in an official report to the Prime Minister, the Ministry of Finance had added some sectors, including the real estate sector, to the list of sectors that will receive tax and land rent extension which is estimated at around VND180 trillion. Earlier, the Ministry of Natural Resources and Environment proposed the Government to exempt land rent in the first six months of this year for all cases of land rent with annual rent payment. By June 30 this year, if real estate companies have not resumed operations, it will consider the exemption for the remaining months of this year. As for the payment of land use fees, enterprises are allowed to pay six months later since the date of the notice.
For production and business, according to the SHS Securities Company, manufacturing and trading enterprises that are negatively affected by the pandemic will enjoy the business support package together with two support packages, including a VND250-trillion credit package and a VND30-trillion tax and fee reduction package. In general, the relief packages for the economy have started to give positive signals from the stock market. The representative of SHS Securities Company said that securities investors always suffer direct impacts whenever the economy fluctuates because the stock market is a thermometer of the economy. It is extremely necessary for securities investors to enjoy preferential capital from the State to be able to stay with the market, especially the fierce market when being heavily affected by the Covid-19 pandemic.