Investors anxious about stock market manipulation

Many shares on the stock market are being manipulating but the market watchdog fails to stop the issue, brokers said.

Many shares on the stock market are being manipulating but the market watchdog fails to stop the issue, brokers said.

(Photo:Minh Tri)
(Photo:Minh Tri)

The construction firm Song Da 9.06 (S96)’s share price surged to VND40,000 this month from the low level of VND15,000 last August, triggering questions about whether the price are being manipulated.

“Some listed firms’ board of directors and big shareholders manipulated their share prices by announcing their firm’s profitable business plans after buying back their shares strongly. And then they took big bucks by selling shares, which were boosted by the information,” said brokers.

Those key shareholders will use the profit from selling shares to buy back more shares in an attempt to ensure their main stakes in the firms, brokers said.

“Therefore, some listed firms focused on issuing additional shares, which will help them to raise their capital strongly,” said a broker in Ho Chi Minh City, who asked to be unnamed.

Last year, the construction company Sudico (SJS) clang on the price of VND60,000 in May before jumping up to VND210,000 five months later.

During the time SJS increasing, there was a rumor on paying dividends by additional shares on the stock market, which then came true as SJS’s share price surged to VND218,000.

PetroVietnam - Nghe An Construction Joint Stock Company (PVA) is among biggest gainers on the stock market this year.

The construction firm’s shareholders made big profits as the share price surged to VND120,000 from VND30,000 in only three months starting from February. Brokers said the share price was manipulated by many investors, who even posted their achievements on some websites.

Investors were anxious on information that Nguyen Thi Kim Phuong, a big shareholder of Cement Materials and Transportation Joint Stock Company (VTV), dumped her entire holding of 557,800 shares.

The State Securities Commission then fined Phuong and two other men VND370 million (US$18,500) for manipulating the share price. However, analysts said the fine was nothing compared with the profit they took from the affair.

Many investors suspected that brokerages, which those people opened trading accounts at, was also involved in the scam.

Similarly the transportation firm Ha Tien (HTV) rose to VND46,000 in September from VND16,000 in June before slumping nearly 75 percent to VND15,400 on December 20.

Some brokers said the slump came after market manipulators failed to boost the share price, while others said manipulators sold the share strongly to take profits from previous surges.

Le Van Dung, chairman and general director of the drug marker Vien Dong (DVD) listed on the Ho Chi Minh stock market was arrested for manipulating share prices last month.

The HCMC-based pharmacy maker earlier was fined VND50 million (US$2,500) for not buying shareholdings in Ha Tay Pharmaceutical JSC (DHT) as it registered to the commission.

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