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Foreign buys help lift HCM City shares
Shares rose on the HCM City Stock Exchange last week due to heavy buys by foreign investors, but declined overall on the Ha Noi exchange without similar support.
In HCM City, the VN-Index posted a gain of 1.67 per cent over the course of the week, ending Friday's session at 459.26. Average volumes increased slightly to 37.8 million shares per session, worth an average of just VND974.6 billion (US$50 million).
Finance conglomerate Ocean Group (OGC) continued as HCM City's most-active share, with an average of almost 1.4 million shares traded per session, while AgriBank Securities Co (AGR) posted the largest gains, rising by over 15 per cent.
Foreign buys accounted for over 15 per cent of market value, accounting for a net of 18 million shares worth a combined VND706 billion ($36.2 million) – 2.2 times higher than the previous week's value and equivalent to two-thirds of their total buys for all of September, noted FPT Securities Company analyst Le Thi Bich Hang.
Increased buys by foreign investors supported the overall market rise in HCM City, offsetting sluggish trading by domestic investors, Hang said. Shares rose 2.16 per cent when foreign investors raised their buys to VND271 billion ($13.9 million) but declined 0.6 per cent when they decreased their buys to just VND85 billion ($4.4 million), she noted.
Foreign buys were focused on large-cap shares like insurer Bao Viet Holdings (BVH) and property developer Vincom (VIC), which each rose by around 11 per cent during last week, as well as Phu My Fertilisers (DPM), which closed up 8.9 per cent on Friday, and developer Hoang Anh Gia Lai (HAG), ended the week up 5.4 per cent.
Foreign investors also restructured their portfolios by selling out low-yield shares, such as Thu Duc Housing Development Corporation (TDH), Sacombank (STB), and Vietinbank (CTG).
SME Securities Company senior analyst Le Van Thanh Long said foreign investment was seeking a combination of value investments and speculation at different price levels.
"Foreign investors still do not believe in the prospect of a strong uptrend," Long said. "Therefore, whenever shares rise above their ‘buy range' they will realise cash profits and buy again when shares decline steeply."
On the Ha Noi Stock Exchange last week, the HNX-Index declined by 3.27 per cent from the previous week's close to end Friday's trading at 121.69 points. While averge daily market volumes rose by 6.5 per cent to 30.3 million shares, daily values dropped by 6 per cent to an average of VND681.5 billion ($35 million).
PetroVietnam Construction (PVX) was again the most heavily traded share nationwide on a volume of 3.36 million units per day, but Quang Nam Transportion Construction Company (QTC) led the market with a cumulative gain of 30.4 per cent.
Third quarter earnings reports expected this week were likely to cast only a modest influence on the market this week, said Nguyen Quang Minh, analyst with the financial information website vietstock.vn.
"Movements of foreign investors will continues affect the market trend this week," Minh said, predicting indices would fluctuate within a narrow band.
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