|
As world tumbles, local exchange stays up
The Vietnamese stock market seemed the only in Asia to have avoided a downturn last week after the hesitant implementation of the US Government's US$700-billion bailout and the bankruptcy of its biggest lending bank Washington Mutual.
Early last week, the US Government released its bailout details, which spurred global investors in two early trading sessions. Investors continued to wait to see the plan implemented, and treated securities investment with a similar wait-and-see attitude.
Unfortunately, US parties have yet to reach an agreement on implementing the bailout.
The week got worse late on Thursday when the biggest US bank Washington Mutual officially declared bankruptcy due to a shortage of liquidity, a day after JP Morgan Chase poured $1.9 billion into buying it back.
The bankruptcy, the sixth in the US financial system this month, continued shaking investors' faith in the bailout, discouraging securities investment. As a result, most Asian markets ended last week in a downturn.
The Vietnamese stock exchange proved an exception, where among five sessions in the week the local exchange only fell on Wednesday in both HCM City and Hanoi bourses.
The VN-Index last week added 10.19 per cent to 483.80, with 142 gaining codes, 42 sliding and one unchanged.
Two major stocks PPC of Pha Lai Thermal Power and PVD of PetroVietnam Drillings were the biggest gainers of the week, while the blue chip sector also contributed in pulling investors back into securities investment.
STB of Sacombank, HPG of Hoa Phat Group and SAM of Cables and Telecom Materials were the busiest codes of the week, with a total trading volume at 7.42 million, 3.13 million and 3.01 million shares, respectively. Other blue chips such as SSI of Saigon Securities Inc, DPM of Phu My Fertilisers or FPT of Financing and Promoting Technology also saw more than 1 million shares change hands.
Market liquidity was 6 per cent higher than the previous week, with market volume at 108.77 million shares at a value of VND3.95 trillion (US$235.23 million).
According to many local securities analysts, the impact of the US financial system's recession was insignificant on the local exchange.
"In fact, there are no globalised enterprises in our stock markets. Other than the fact that the US is one of the biggest importing markets of Vietnam, the other factors were of no concern," said Bien Viet Securities' deputy director Vu Duc Nghia.
Nghia also said that the market was too small to feel a direct impact from the US financial recession. "If there had been any impact, it would have been on investors' attitudes toward the recession or concerns when they saw foreign institutions selling shares at remarkable volumes recently."
According to the Market Development Department under the State Securities Commission, the sale from foreign funds mainly aimed to adjust the investment portfolio in a bid to cope with difficulties given by this tough period of the economy.
"In addition, they continued buying back shares, not only selling," said Nguyen Son, head of the department.
Last week, foreigners bought a total of 25.03 million shares and sold 16.88 million. This sector also focused their purchase in companies with good business performance, including HPG, DPM and PPC.
"Anyway, the foreign sector could not help much on the local exchange in the entire year, as they have more than the Vietnamese exchange to pour money into," said Vu Hoang Ha, a veteran investor in Hanoi.
Ha also said that the market this week would see a mix of ups and downs, as it would still be governed by the psychological factor that came from its leading domestic traders, the young and inexperienced investors.
At the Ha Noi Securities Trading Centre, the HASTC-Index also gained 9.26 per cent to 160.31, with a total 55.63 million shares traded worth of VND685.10 billion ($40.77 million).
Big stocks like ACB of Asia Commercial Bank, VCG of constructor Vinaconex Group or KLS of Kim Long Securities got the heaviest trading volume, with each share seeing over 5 million shares change hands.
Foreigners last week balanced their purchases and sales in this market when they bought 3.27 million and sold 3.18 million shares.
Last week, the stock market welcomed some important news, including a higher FDI (foreign direct investment) at $57.1 billion both existing and newly registered projects in the first nine months, a $500-million trade deficit in September, and the State Bank's confirmation of the prime interest rate at 14 per cent.
"Though no big news came in, we expected this information would continue confirming investors' faith in the Government's plans to stabilise the economy by the end of this year. Thus the stock market should run smoothly," said Nghia.
VNN
|
