Tuesday, 09/02/2010 08:24

Markets post gains ahead of Tet holiday

Heavy buys early last week helped stock indices gain ground last week, with the VN-Index closing on Friday at 493.04, an increase of 2.3 percent over the previous Friday's session.

Trading on the HCM City Stock Exchange average VND1.2 trillion (US$66 million) per day, up 14.9 percent from previous week, on an average daily volume of 25.76 million shares.

On the Ha Noi Stock Exchange, the HNX-Index rose by a modest 0.93 percent on the week to 161.84 points. Market volume remained poor, at an average of 14.8 million shares per session, worth an average of VND481 billion ($26 million).

FPT Securities Company analyst Nguyen Tuan blamed low market liquidity on the coming Tet holiday, which arrives at the end of this week.

"The tradition of paying debts before the new year causes trading to slow as the holiday approaches," said Nguyen Hoang Hai, Head of market analysis for a HCM City-based brokerage." Market doldrums are always seen at this time, not only in domestic markets, but also in other regional markets."

It was the foreign sector which contributed to much of last week's market gains, Hai noted.

"We were able to witness a thorough buy-in from this sector all week, at double the value of a week ago," he said, noting that foreign investors picked up a net of 10 million shares last week, worth a combined VND828.4 billion ($44.8 million).

Hai also noted rumours that some major overseas funds were planning to inject money into the local market. "Such rumours could be true because emerging markets like ours are promising destinations, with fast-recovering economies and inexperienced perspectives from local investors."

Tuan said that gloomy global markets could have a negative impact on domestic trading, and he pointed to Friday's session as a clue.

"We considered Friday's sell-off as a reaction to the situation abroad," Tuan said. "It would be hard to buck the trend if we saw more bad news from global markets."

He predicted sluggish transactions this week as domestic investors were busy with Tet preparations.

"The VN-Index will swing between 485 and 510 points this week," he said, recommending investors buy in when the market fluctuates more than 1 percent and to sell off when profits of 2 percent can be realised.

vietnamnews

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