Many penny stocks run to the upswing

More than 100 real estate penny stocks on HoSE, HNX, and UPCoM have experienced significant increases. Penny stocks of firms with small and medium market capitalisations of less than VND1,000 billion, which account for 80% of the total, have all grown in price.

"Racing" to uptrend

LDG topped the surge among penny stocks, rising 82% in just the first half of July. Until July 18, this company had 8 straight ceiling price sessions and has become one of the stocks with the most liquidity ever. In the explanatory documents provided to the Ho Chi Minh City Stock Exchange (HoSE), LDG's Board of Directors said that recent stock price changes were caused by market supply and demand trends outside the company's control. At the same time, LDG confirmed that company operations are continuing properly and that there is no influence on the stock price.

Following LDG stock, DRH stock steadily gained in price from the bottom to VND3,950/share on July 18, with a trading volume of tens of millions of shares.

Additionally, NRC shares rose by 32% during the first half of July. At the General Meeting of Shareholders, NRC adopted a rather ambitious 2025 business plan with total consolidated revenue and pre-tax profit of VND959 billion and VND25 billion, respectively. Previously, in 2024, NRC had a record financial loss of almost VND137 billion.

In addition, several penny stocks, such as VPH and BCG, had significant growth momentum in early July. Although VPH shares climbed significantly by the end of the first quarter of 2025, this enterprise's economic performance was not very satisfactory, with a net loss of more than VND9 billion. BCG shares have fallen by over 61% since the beginning of the year owing to trading restrictions. Recently, on July 21, BCG shares hit VND3,720 per share, escaping the bottom...

Beware of risks

Because of their low prices, penny stocks have become popular among investors. Typically, new investors with fewer funds will prefer to take chances with penny stocks. They may purchase penny stocks without huge sums of money yet still hold a large number of stocks. For example, with BCG trading at VND3,720 per share, investors just need VND10 million to purchase thousands of BCG shares...

Many penny stocks move widely, with some even reaching the ceiling for dozens of straight sessions, prompting investors to "surf" these stocks. However, this growth is not sustainable; it can reverse trends and decline at any time, leading these stocks to fall for several consecutive sessions, creating hazards to investors. The fact that LDG stock fell on July 21 demonstrates that high returns usually come with big risks.

Furthermore, it is difficult to assess a penny stock issuer's financial status, managerial competence, and overall success. Compared to blue-chip companies, investors must conduct extensive research on penny stocks, yet there are still hazards.

Although penny stocks have low prices, which attract investors with limited capital, many of them are easily restricted from trading due to the company's poor financial situation, prolonged losses... This also carries significant hazards for investors, allowing them to get "buried in capital" and have difficulty selling these stocks.

Furthermore, many penny stocks have limited liquidity, which is seen in their low trading volume. The low trading volume makes it harder for investors to buy or sell these equities. Investors may be trapped with low-liquidity equities since there aren't always buyers in the market.

Thus, while penny stocks can provide large returns, they also carry significant risks. To minimise risks and maximise earnings, investors must exercise extreme caution, conduct extensive research, and have a good investing strategy in place. Investing in these stocks should be limited to a small portion of one's overall investment portfolio and considered speculative.