The stock market on August 28th witnessed a surge in trading volume for the DIG shares of the Construction Development Investment Corporation (DIC Corp). Nearly 42 million units changed hands in a single day, the highest across the exchange, equivalent to nearly 7% of the company’s circulating shares. This volume was twice the average daily volume over the past year and three times that of the previous session.
Heavy selling pressure pushed the DIG shares lower, falling more than 6% intraday before bottom-fishers stepped in to curb the decline. At the close of August 28th, DIG shares traded at VND 24,050, down 4%. The company’s market capitalization stood at over VND 14,700 billion, a more than 10% decline since the start of 2024.
The selling frenzy followed the announcement of the Government Inspectorate’s conclusion regarding the inspection of equitization and state capital divestment at DIC Corp.
According to the Government Inspectorate, the equitization and state capital divestment process at DIC Corp was marred by limitations, shortcomings, and violations. These included deviations from prescribed procedures and inaccurate asset valuation, particularly regarding the valuation of land use rights for 25 villas in the Phuong Nam Villa Complex and the Dai Phuoc Eco-Tourism Urban Area project in Dong Nai province.
The inspection also revealed violations in the determination of state capital value during the equitization process, with DIC Corp improperly including losses from three subsidiary companies. Other infractions pertained to private placements, divestment procedures, and state capital share price determination.
The Inspectorate attributed responsibility for these violations to the leadership of the Ministry of Construction during the 2007-2009 and 2016-2017 periods, as well as the Steering Committee for DIC Corp.’s equitization.
In terms of business performance, DIC Corp reported a doubling of its revenue to VND 822 billion for the first six months of 2024 compared to the same period last year. However, surging expenses and a decline in financial income caused a steep 95% drop in after-tax profit, which stood at just under VND 4 billion.
Dragon Capital Chairman: “Long-term vision is needed, accepting necessary adjustments for a safer, more efficient, and higher quality market”
According to Mr. Dominic Scriven, Chairman of Dragon Capital, the role of the finance industry in the stock market will be significant in 2023 and possibly in 2024. The roles of other industries, such as real estate or consumer goods, will depend on their respective challenges.
Investing in a volatile market: Should beginners consider putting money into high-yield bonds for 10-30% yearly profit?
Short-term stock market trading has proven to be a risky venture for many investors, leading to substantial losses. However, there are a few select open funds that have managed to achieve impressive returns, reaching up to 30%.
