VietNamNet Bridge - Veteran investors could lose billions of dollars because of rumors. 

Tran Bac Ha, former president of BIDV

In early August, a rumor spread via social networks that former president of BIDV, a state-owned bank, was arrested. The price of BIDV shares plunged immediately.

The rumor ‘blew away’ nearly VND10 trillion worth of BIDV capitalization value after one trading session and $2 billion in the stock market ‘evaporated’. The VN Index then saw the biggest drop in 10 months.

The shares of other banks also suffered with lost value estimated at $700 million. The stock price tumbled suddenly, breaking the upward trend which had lasted many days before. 

Though both the Ministry of Public Security and BIDV came forward and denied the arrest of Tran Bac Ha, the rumor caused a shock to the market.

In early November, the shareholders of Hoa Binh Construction Group (HBC) saw HBC prices drop dramatically, reducing the capitalization value by VND1.5 trillion, though the stock market was ‘scorching hot’ at that moment and all other stock prices were on the rise.

The reason behind the rumor was that Khaisilk refused to pay the debt of VND2.5 trillion to HBC for a project in district 7.

Besides the rumors, the stock market was hit by scandals of government officials. Ho Thi Kim Thoa was dismissed from her position as Deputy Minister of Industry and Trade and relieved of her membership on the Party Civil Affairs Committee at the Ministry.

The Inspection Commission found Thoa’s serious violations of the regulation on business equitization while she was working at Dien Quang Lamp JSC. The share price of the company dropped to its lowest point in three years and Thoa, as a shareholder, lost several million dollars.

The stock market also witnessed sharp index decreases at trading sessions after the announcement about the arrest of Dinh La Thang and Nguyen Quoc Khanh, the two former chairs of PetroVietnam.

At a time when the rumor about the arrest of BIDV’s Tran Bac Ha appeared for the first time in 2013, the stock index fell by 4 percent and $1.6 billion was lost on both the Hanoi and HCMC bourses.

A series of banks and businesses also met with misfortune in the last few years because of rumors about the arrest of businesses’ senior executives such as Le Hung Dung, former chair of Eximbank, Nguyen Dang Quang, chair of Masan and Nguyen Duy Hung, chair of SSI (Saigon Securities Incorporated). Except in some cases, most of the rumors were false.

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M. Ha