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Market undergoes ‘necessary' correction to prevent bull run
| Exchange announces annual report contest
HCM City Stock Exchange in co-operation with the Dau Tu Chung Khoan (Securities investment) magazine, is organising the Annual Report Awards 2010, which will cover all listed firms on the country's two stock exchanges.
The award, sponsored by the fund management company Dragon Capital, seeks to honour companies with professional annual reports of high transparency that provide the most information to investors, rather than the company's performance, according to Le Nhi Nang, HoSE's Deputy General Director.
This is the third sucessive year the awards are being granted.
"We see that after the first two awards, many listed companies became more aware of the importance of the report in marketing themselves to investors and partners," Nang said at Thursday's press briefing.
The awards ceremony is set to take place in late July.
Almost 500 companies are listed on the two exchanges. |
Profit-taking pressures pushed the HCM City Stock Exchange into a correction last week, causing the VN-Index to lose a total of 2.92 per cent of its value to close on Friday at 515.99.
Daily trading volumes also retreated from the previous week to 53.3 million shares, for an average daily value of VND2.3 trillion (US$122.6 million).
On the Ha Noi Stock Exchange, the HNX-Index also finished off on the week by a total of just over 2 per cent, ending the day on Friday at 169.85 points. However, the average daily value of trades on this market continued to improve, rising by 2.14 per cent to nearly VND1.1 trillion ($57.3 million) on an average volume of just under 32.5 million shares.
FPT Securities Company analyst Nguyen Duy Ngoc called last week's market performance a necessary correction after two weeks of gains, preventing the market from entering a ‘bull' run.
Every session last week, with the exception of Tuesday, saw active participation by buyers, many of whom were drawing money out of low-price zones before reinvesting, said Ngoc. The overall signs were good for market development, he said, blaming Tuesday on the announcement of a loss by petrol distributor Petrolimex, as well as rumours that Saigon Securities Inc was allowing clients to make short sales.
"The solidity in both volume and values demonstrates that investors are still increasing their stock holdings," said Ngoc. "If this tactic continues this week, the market will avoid any steep dips."
The activity of foreign investors remained the only black mark on last week's market, he added. Foreign investors accounted for only a tiny percentage of overall trades despite remaining net buyers on the week of a combined 3.3 million shares on both exchanges, worth a net of VND380 billion ($20 million).
Ngoc recommended that investors keep an eye on foreign investors' trades this week, noting that March 31 was the end of the fiscal year for many investment funds.
He noted that some significant economic news was due this week, including national inflation and growth figures for March and a new statement from the central bank about the prime rate for April.
"The stock market could see a rally this week, but the bulls won't run away with it," he said, predicting that the VN-Index this week would range between 505 and 530 points.
Tran Thi Kim Thanh, Deputy Head of research at Hai Phong Securities Company, also predicted that many investors would continue to focus on shares in companies preparing stock splits or bonus share offers, while otherwise keeping their powder dry until they received clearer signals about the state of the economy.
Thanh said that day traders buy in on days of market decline and shoot to realise profits when the VN-Index reaches 530. For long-term investors, Thanh recommended real estate and construction stocks.
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