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Stocks rise on new investor excitement
Domestic stocks advanced sharply last week as investor excitement pushed trading volumes to record highs on the local stock exchange.
The VN-Index advanced 14.77 points overall last week to close at just over 325 - a rise of 4.76 per cent over the previous Friday’s close - fuelling hopes that the index could reach the psychologically important mark of 350 in the short term.
Average volumes averaged 40 million shares per day, up 48 per cent over the previous week’s average, while daily values were roughly VND910 billion (US$51 million), an increase of 58 per cent.
Automotive shares posted the sharpest increase last week, up 20 per cent, according to FPT Securities Co data, followed by telecommunications shares, 15.3 per cent, and banking and financial shares, 13.5 per cent. The latter showed the highest activity, with Sacombank (STB) and Saigon Securities Inc (SSI) leading the HCM City exchange in volume, while Asia Commercial Bank (ACB) and Kim Long Securities (KLS) were leaders on the northern bourse.
Dao Viet Anh from FPT Securities’ brokerage department said investors were confident in market increases with expectations of satisfactory business results for "prospective shares" in the banking and financial areas, at a time the VN-Index had surpassed 320 points and high demand for shares was being maintained.
Tourism and entertainment shares declined the most, dropping 1.7 per cent.
Along with more money being poured into the market, a few bright spots last week that may have stoked investor enthusiasm were a World Bank report putting as low the risk of a financial crisis in Viet Nam and a move by the State Bank of Viet Nam to slash the discount and refinance rates - changes expected to further ease bank lending rates to enterprises, according to an FPT Securities Co report.
Many investors had reaped substantial profits in recent days with strong market rallies, said Anh, and investor interest was likely to sustain substantial trading volumes this week.
The VN-Index had gained nearly 40 per cent since hitting bottom at 235 points in February, and some codes had even doubled in value, Anh noted.
But, he warned, "This is synonymous with saying that the market could adjust downwards." He predicted a VN-Index ranging between 310 and 340 in the coming week.
Caution recommended
But EuroCapital Securities Co analyst Ngo Van Minh said, with the current capital inflows and absence of any bad news on world markets" the VN-Index could absolutely surpass 352 this week, driven by banking and financial shares." But he also cautioned, "It’s too early to determine whether the current upward trend on the market is sustainable.
"At this time, opportunities are great for investors, especially those who have not taken part in the market over the past few weeks, but risks are also great," Minh said.
"Investors should pay attention to firms’ first-quarter financial reports to be released this week to make the right investment decisions," suggested Anh.
"Global stock market moves are still an important indicator in directing investor transactions, and there’s a high possibility that this will continue for the next few weeks, "Anh said.
Net sales by foreign investors throughout last week may also significantly influence investor sentiment this week. Foreign investors showed modest activity last week, generating trades for only 24 million shares. They were responsible for a net sales volume of 10.4 million shares, world VND186.5 billion ($10.5 million).
In Ha Noi last week, the HASTC-Index climbed 9.73 points to end at 118.58, an increase of 8.94 per cent. Trading volumes averaged at 23.3 million shares per day, up 64 per cent over the previous week’s average; while the average daily turnover nearly doubled to VND545.2 billion ($30.6 million).
The HASTC-Index was expected to range between 110 am 125 this week, said Anh.
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