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Domestic stocks resist profit-taking pressure
The VN-Index held firm above the psychologically significant 500-mark last week with five consecutive days of modest increases, despite significant pressure from profit-taking.
The Index added 26.34 points overall last week, or 5.48 per cent, to close on Friday at 506.65.
Trading volumes on the HCM City Stock Exchange averaged at 57 million shares per day, increasing 28 per cent over the previous week’s average, while daily turnover averaged at VND2.1 trillion (US$118 million), up 24 per cent.
On the Ha Noi Stock Exchange, the HNX-Index ended the week at 157.18, up 5.48 points, or 3.61 per cent, over the previous Friday’s close.
Trading volumes on the northern exchange averaged 25.2 million shares per day, up 23 per cent over the previous week’s average, while turnover reached about VND825 billion ($46.3 million), an increase of 24 per cent.
Nguyen Binh Duong from the FPT Securities Co brokerage department said that profit-taking was prevalent last week, "but money flows returned, helping the market hold firm."
Late-week blue chip rallies much excited investors, with increases driven by investor expectations for satisfactory earnings for the rest of the year, along with improved global economic conditions, he said, citing strong growth data from China and Singapore, and rallies in Germany and France.
"Hopes for an economic recovery in the coming months accelerated market demand, despite waves of profit-taking... The upward trend is now quite strong, and we expect the Index to head to 525 this week," Duong said.
Duong noted that current upward moves were different from market gains in early June, when the market was a bit overheated and all shares were rising across the board. Currently, he said, the Index was increasing solidly, with money being poured only into shares with good business results.
BIDV Securities Co analyst Tong Minh Tuan agreed, saying that "in contrast to other times this year when the VN-Index increased, there are many reasons to be confident. There is a very high probability that the Index will hold firm above 500 this time."
Tuan said State Bank of Viet Nam monetary policies were expected to support both the economy and the stock market in the coming months, while the manufacturing, construction and export sectors were expected to show higher profitability in the third and fourth quarters.
Foreign investors last week continued to demonstrate confidence in the domestic stock market last week, Duong noted.
In HCM City last week, foreign investors were net buyers of about 129,000 shares, worth a net VND47.4 billion ($2.7 million). In Ha Noi, foreign investors were responsible for net buys of 492,000 shares, worth VND41.8 billion ($2.3 million).
On the unlisted public company market, the UPCoM-Index fell short of recovering its starting mark of 100, ending last week at 96.54 points, while activity remained sluggish on an average volume of only 180,000 shares per day.
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