On January 21, the VN-Index hit a record high of 973.18 points, a little less than the 1,000 mark while the securities market’s transaction value reached approximately VND1,000 billion. The Hanoi Securities Trading Centre (HASTC) index also jumped to 315.96 points. According to securities investors and economic experts, the Vietnamese securities market is rather "too hot".

The current securities fever has gripped many people, even those without stock-related knowledge such as housewives and pensioners. These buyers like to make a profit from rising share prices without knowing much about the company from which they decide to buy shares. There is no other reason to explain why stock prices are constantly increasing at the stock exchange centres and at over- the-counter (OTC) markets.

Many shares have doubled or trebled in just half a month. For the time being, no form of business and investment brings in such high profits. The securities market is operating like a magnet to investors who are keen to buy shares from the banking, insurance and oil and gas sectors.

Newly-listed shares which receive initial buying orders can drive their prices up and inexperienced individual investors will follow the "crowd". Price hikes in shares from the Joint Stock Investment and Development Company FPT is a typical case in point.

Economic experts say the main cause of price fever on the securities market in recent times is that share supply is lower than demand while the number of people attracted to stock trading is on the rise.

In fact, the securities market is becoming more attractive to new investors, regardless of the size of their capital; particularly the OTC market where shares can be bought and sold over the telephone.

Price hikes in stocks are also attributed to private investors’ speculation and lack of information.

Governor of the State Bank of Vietnam Le Duc Thuy explains about factors in the purchase price of stocks. Apart from undervaluing their shares, inaccurate financial records from companies can push prices up, putting inexperienced investors in the danger of losing their money.

The price of shares has risen at an unbelievable rate of 2.5 times within just one month.

Dr Vo Tri Thanh, head of the International Integration Department under the National Institute for Economic Management, says the current development in the securities market is abnormal. Mr Thanh says organised investors always look to long-term investment. But there are also short-term investors in the market and profits are being gained from both unprofessional and private investors. Professional investors can easily manage information through the way they provide information and buy or sell shares. In other words, they can hold sway over the market.

Judging from the development of the securities market, it is clear that foreign investors can have a special impact on the increase of prices in share series. Apart from foreign investors who make long-term investments, many others buy and sell immediately. Until now, no individual or organisation has been accused of joining hands to capitalize on shares.

However, as the legal system has not yet built strict regulations and management mechanisms, many investors, particularly new investors, tent to follow the crowd.

What is the advice for investors? Experts suggest that investors should thoroughly look into performance and turnover of enterprises and refer to the P/E ratio as the principle index for investment decisions. (The P/E ratio of a stock