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VN-Index goes past 500 to two-month high
The Ho Chi Minh City stock market rose for a fourth straight day, climbing 1.3 percent to a two-month high of 503.58, and analysts said the upward trend would continue over the coming weeks.
Heavy buying happened soon after the opening bell, helping the VNIndex break through 500-point level to close at 501.99 points in the first session. The index continued its rising trend to reach 505.23 in the second session before losing some ground to finish at 503.58. The measure has gained 60 percent this year.
Nearly 65 million shares changed hands as advances outnumbered declines by 85 to 66 and 15 stocks remained unchanged.
By sector, financials and healthcare were among the big gainers while oil and gas, and technology were the losers.
In Hanoi, the HNX-Index advanced 1.57 points, or 1 percent, to close at 157.95.
Hoang Thach Lan, vice director of SME Securities Corp.’s Ho Chi Minh City branch said the market is on the upward trend.
“Recent trading sessions have showed the winning trend is relatively stable. The domestic economy continues to show good signs,” he said.
“Inflation is not a worry though many investors are concerned about it. The government knows of the dangers of high inflation that happened last year and so, it will always have measures to prevent it from occurring again.
“Now, the point is whether businesses’ operations are really getting better, or if they have been temporarily boosted by the economic stimulus package.”
Johan Kruimer, head of brokerage at Ho Chi Minh City Securities Corporation (HSC), said in a daily market comment, “The fact that the market is moving higher without any assistance is an indication that the psychological undertone is very strong. This should normally lead to higher prices in the days and weeks to come. Also, the first closing of the VNIndex above the 500 level since mid of June is very significant in terms of investor sentiment and confidence.
He said if there were no disastrous external events, the closing high of 512.46 on June 9 should be surpassed in coming weeks.
“The extent of this rally in terms of time as well as index level is very unpredictable as Vietnam is a sort of a ‘gold rush’ market where the final stage of a rally is always accompanied by massive inflows of fresh money. That usually causes this final stage to have an exponential character and the rally will only be finished when this fresh inflow dries up.
“For the moment, investors can enjoy the ride as there is enough upside potential in a number of stocks. We do maintain our opinion that we are in the tail end of this rally... but the tail can be long.”
Foreign investors were net sellers Wednesday, picking up shares worth VND144 billion (US$8.4 million) and selling for VND194 billion.
Saigon Thuong Tin Joint Stock Commercial Bank, or Sacombank, was the most active stock with more than 8.7 million shares traded.
Khong Van Minh, investment director of Jaccar Capital Fund in Ho Chi Minh City, recommended buying real estate, commodity, and building materials stocks.
“From now until at least the middle of next year, property stocks offer potential as investors will put money they gain in the stock market in real estate market to diversify risks. Construction and building material companies will still enjoy the government’s investments in infrastructure projects,” he said.
On possible listings of Vietnam Export-Import Commercial Joint-Stock Bank and Military Commercial Joint-Stock Bank, Minh said, “The listings of the country’s large banks may not necessarily boost supply of the market because their shares have already been trading in the over-the-counter market. The listings of these large lenders will improve the stock market value and will help attract more foreign funds to the market.”
Rubber stocks
Hoa Binh Rubber Joint-Stock Co. on Wednesday led Vietnamese producers of the material higher on speculation increased prices for commodities will boost the companies’ earnings.
Hoa Binh Rubber surged by its 5 percent daily limit to VND42,200 on the Ho Chi Minh Stock Exchange, its steepest advance since April 27. Dong Phu Rubber Joint-Stock Co., the country’s biggest listed producer, rose 4.9 percent to VND53,500 while Tay Ninh Rubber Joint-Stock Co., the No. 2, rose 4.6 percent to VND57,000, its highest in more than three months.
“Rubber is considered one of the most profitable stock groups that investors are buying,” Phung Trung Kien, head of research at APEC Securities Inc. said. “The international price of rubber is increasing and that will benefit local makers, especially in the third quarter when they harvest latex.”
Rubber futures in Tokyo Wednesday added as much as 4.4 percent to the highest since October 9 as oil extended gains after US equities increased and the Federal Reserve said the recession is easing and pledged to keep interest rates low. A rise in oil prices boosts the appeal of natural rubber against synthetic product.
Global stocks
Asian markets rebounded Wednesday as the US Federal Reserve gave a positive outlook for the world's biggest economy, spurring investors to pounce on stocks that had tumbled the previous day.
Hong Kong jumped 2.08 percent, Tokyo 0.79 percent and Sydney 2.14 percent, while Taipei was almost two percent firmer and Shanghai 0.89 percent up.
Europe's main stock markets also advanced Wednesday, with London reaching a 10-month high, after a positive outlook for the US economy and data showing an end to recession in Germany and France.
London's benchmark FTSE 100 index of leading shares rose 1.11 percent to 4,768.97 points approaching midday in the British capital. It was the highest level since early October.
Frankfurt's DAX 30 gained 1.42 percent to 5,426.29 points and in Paris the CAC 40 added 0.97 percent to 3,541.24.
Thao Vi
thanhnien, AFP, Bloomberg
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