Tuesday, 26/05/2009 18:18

Small caps rally as investor interests shift

Many small stocks have made strong rallies over the past two weeks as investors shift their interest from large caps to small caps on speculation that blue chips had peaked, analysts said.

From May 11 to 22, paper maker Hapaco Corp., based in the northern port city of Hai Phong, jumped 37.3 percent to VND22,100 while the VNIndex gained 8.5 percent in that period. Trading was lively, with more than 420,000 Haphaco (HAP) shares changing hands on average every day.

Dong Nai Plastic Joint-Stock Co. (DNP) finished last Friday at VND16,000, up 24 percent from May 11’s close. Average daily turnover increased from 36,100 shares in the week ending May 15 to 122,400 last week.

Many other small stocks like Asia Huu Lien Joint-Stock Co. (HLA), Vinasun Corp. (VNS), Truong Thanh Furniture Corp. (TTF), and Vietnam Electricity Construction Joint-Stock Corp. (VNE) have also posted significant gains in the past two weeks.

Ho Chi Minh City Securities Corporation said some smaller or lower priced issues have been attracting heavy buyer interest, adding it was partly a reflection of rotational buying on the part of speculators.

Meanwhile, Saigon Securities Inc. said individual investors have shifted their interest to small stocks as they think blue chips are now relatively expensive and their prices are unlikely to go up further.

Investors unsure whether the economic slowdown has ended are hesitant to buy shares worth VND50,000-60,000 on concerns they would not make any gains, VnExpress online newspaper quoted Ngo Thanh Phat, HCMC-based investment analyst at the Vietnam International Securities Co., or VISecurities, as saying.

Phat also said good first quarter results have helped boost small stocks.

A new influx of money has been pumped into the market and most of it comes from individual investors, he said, adding many of them have picked up small stocks.

Saigon Securities Inc. said investors’ interest in small caps means fears of market risks are decreasing.

But VnExpress quoted Phan Anh Tuan, Deputy General Director of Vincom Securities, as saying investing in small stocks has “certain risks” in terms of their ability to fight the economic slowdown.

thanhnien, vietnamplus

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