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HCMC market rebounds as US rate cut buoys Wall St
Ho Chi Minh City shares Wednesday clawed back some of Tuesday’s steep losses to close above 300 points after a drastic cut in US interest rates sparked gains on Wall Street overnight.
The VN-Index opened in the red, falling 1.38 points to close at 295.04. But things looked up in the next two sessions and it finished the day at 301.02, up 4.6 points or 1.55 percent from Tuesday’s close.
Turnover was 15.4 million shares valued at VND264 billion (US$15.5 million) as 91 stocks advanced, 52 declined and 30 remained unchanged.
Lai Minh Tam, a broker at HCMC-based VinaGlobal Securities Corporation, said Wall Street’s overnight rally and gains across Asian markets inspired investors.
The Fed on Tuesday reduced the target fed-funds rate from one percent to a range of zero to 0.25 percent, the lowest since it began publishing the target in 1990 and said rates would be kept “exceptionally low” for now.
The Fed's decision, aimed at reviving the world's biggest economy, sent US shares surging, with the Dow Jones Industrial Average jumping 4.2 percent and the Nasdaq adding 5.4 percent.
In Asia, Japanese share prices ended up at 0.52 percent, Hong Kong closed 2.2 percent higher and China added 0.09 percent.
Tam expects an increase in US consumption demand during Christmas and New Year’s to help boost its stock market and the Vietnamese market would then follow suit.
“The VN-Index will hover between 300 and 320 this month,” he predicted.
Phung Trung Kien, a Hanoi-based analyst at the securities unit of Vietnam Joint-Stock Commercial Bank for Private Enterprises, known as VPBank, said, “The stock market saw the return of foreign investors this week - they bought VND43 billion worth shares Wednesday - and many listed companies, including Saigon Securities Inc. and Saigon Thuong Tin Commercial Joint-Stock Bank, registered to buy back shares to stabilize their stock prices, helping to prevent a further slump in the market.
“There was also some positive news in the announcement of an economic stimulus package that is expected to rise to $6 billion, up from $1 billion planned before.
“The government switched its priority from controlling inflation to cautiously loosening monetary policy. Interest rates are expected to be cut further very soon to support the economy and prevent an economic downturn.
“All this news helped to improve local investor sentiment amid gloomy earnings reports.
“The index is not expected to rebound strongly before the end of the year, but I think if the government can cut rates and introduce the stimulus package, it will help to prevent a big slump in the market.”
Software producer and mobile-phone distributor FPT, partly owned by Deutsche Bank AG, gained VND2,000, or 4 percent, to close at VND52,500. The company said on the exchange’s website it has called off a plan to sell additional shares, without offering an explanation.
Steel maker Hoa Phat Group added VND1,000, or 3.5 percent, to finish at VND29,900. The company, based in the northern province of Hung Yen, signed a contract to supply 3,800 tons of steel to the Duyen Ha cement plant in the northern province of Ninh Binh, according to the company’s website.
Vietnam Tanker Joint Stock Company (VITACO), rose by VND300, or 2.6 percent, to VND12,000. The HCMC-based company has received a new oil tanker to expand its capacity to transport imported petroleum products.
Electrical appliances maker Refrigeration Electrical Engineering Corporation advanced by VND200, or 0.91 percent, to VND22,200. The HCMC-based company said its pre-tax profit in November was nearly VND39 billion ($2.3 million).
Thao Vi
AFP, Bloomberg
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