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Shares rally on global hopes
Heavy buys in the last two sessions of last week helped lift the market into positive territory last week.
On the HCM City Stock Exchange, the VN-Index added 10.75 points on the week to close on Friday at 454.71. Average trading volume fell 8.4 per cent from the previous week and 24.9 million shares traded and an average daily value of VND861.4 billion (US$48.8 million).
Sacombank (STB) remained the most active share, with 20.4 million changing hands on the week.
On the Ha Noi Stock Exchange, the HNX-Index also added 10.75 points to the previous Friday’s close to end the week at 154.62 points. Average daily volume on the northern bourse rose 10.5 per cent over the previous week to 13.9 million shares, worth an average-per-day of VND429.2 billion ($24.1 million).
Asia Commercial Bank (ACB) led the northern market with a total of 10.8 million shares traded during the week.
Foreign investors emerged as net buyers on the HCM City bourse last week, picking up a net of 7.8 million shares worth a combined VND376.4 billion ($21.1 million). But they ended the week as net sellers in Ha Noi, unloading a net of 437,700 shares worth a net total of VND6.1 billion ($342,696).
"Share prices have returned to a profitable level to buy in, after a period of fluctuation, and investors have begun to realise that this is a good opportunity to rejoin the market," said Vincom Securities Co analysts in a report.
Ngo Anh Tuan from FPT Securities Co pointed to positive moves on the US market as a contributing factor to the local rally. Global confidence in an economic recovery seemed to be renewed by the Dow Jones passing the 9,000-mark last week, Tuan said.
"However, it’s hard to achieve a long-term rally with only outdoor influence," he said.
At the middle of last week, the State Bank of Viet Nam also tried to clarify its stance towards rumours of tightened credit for securities traders, as well as to deny rumours of a new T-bill issue that would divert capital away from the stock market. Both seemed to reassure domestic investors in the final sessions of last week.
However, the central bank also reminded investors of the looming threat of inflation making a comeback, said investor Nguyen Quoc Trung, a member of the Vietstock forum. Trading volumes last week continued to remain low.
John Nolan, an analyst with a HCM City fund management company, said that lower volumes did not mean an attractive securities market. "Investors have begun turning to long-term or value investments, concentrating on major firms with high growth potential," Nolan said. He urged investors to keep an eye on inflation and whether export levels begin to rise once again.
The present market had few opportunities for day traders, which would tend to explain why daily trading values remained below VND1 trillion, Nolan said.
FPT Securities Co analyst Tuan said that a stronger pipeline of capital in the final two sessions of the week raised hopes of stronger activity this week.
"Investors should raise shareholdings to 50 per cent of their total portfolios," Tuan said, suggesting that risk-averse investorslook to banking and financial shares next week.
The unlisted public companies market, or UPCoM, last week saw its first week of overall gains since the market’s inception, advancing 3.72 per cent overall on the week to close at 75.17.
"The rally followed the prevailing trend on official markets, but poor options for trading remain as a barrier to development of this market," commented Nolan.
"This market has been operating for a month and the initial days seemed like a trial run. But it is a market, and it needs something to heat up traing," he added, suggesting that listed companies work more with investors relations to entice traders to this market.
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