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Stocks soar in wake of Wall Street rally
Stocks soared on the HCM City Stock Exchange last week, with the VN-Index advancing 4.73 per cent on the week to close at 609.54, on very heavy trading.
Nguyen Thuy Van from a Singapore-based securities research institute said gains on Wall Street last week, where the Dow Jones passed the 10,000-mark, excited investors and "proved that the US economy is gradually recovering and that the crisis may be over."
Daily trading volume in HCM City averaged over 93.3 million shares, worth an average of VND4.5 trillion (US$252.8 million) per day, double the previous week’s daily turnover. Sacombank (STB) remained the most active share of the week, with a cumulative volume of 25.5 million shares.
On the Ha Noi Stock Exchange, the HNX-Index accumulated an even more impressive 9.05 per cent over the previous Friday’s close to end the week at 206.82.
The Ha Noi market also witnessed a doubling of market value, with a daily average topping VND2.4 billion ($134.8 million) on an average volume of 54.5 million shares. Sai Gon-Ha Noi Commercial Bank (SHB) was the most heavily traded share, with a volume of 21.6 million.
Foreign investors contributed substantially to heavy volumes, buying a net of 10.2 million shares on both markets, worth a net of VND777 billion ($43.6 million).
The significant increase in market volume was a good sign, reflecting increasing flows of capital into securities, said John Nolan, an analyst with a HCM City-based fund management company.
"However, it is notable that part of this flow originated from the high rate of use of finance leverage," said Nolan, noting that the State Securities Commission had warned of a coming crackdown on the ability of securities firms to provide financing for their clients’ securities investments.
Nolan therefore suggested investors to look back to 2008 and the last time regulators restricting lending for securities investment and invest with an eye to long-term profit rather than instant money.
"Listed firms have begun seeing optimistic moves in their business results," he added. "It sounds good for investors to start looking long-term now."
FPT Securities Co analyst Dao Viet Anh also recommended investors keep an eye on third-quarter earnings and warned against investing in shares that have already seen bullish gains in value.
Anh forecast a VN-Index in the range of 600 to 630 points this week, with mixed trading.
On the wake of the principal markets, the market for unlisted public companies saw a bright week last week, with the UPCoM-Index rising 7.4 per cent to 72.31 points. Average market volume topped at 480,000 shares for a daily value of VND5.6 billion ($314,606).
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