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Penny stocks help lift markets
Active trading by local investors helped lift the nation's stock markets last week, with the VN-Index rising by a cumulative 3.15 per cent over the course of the week to close on Friday at 439.94 points.
Gains were across-the-board on the HCM City Stock Exchange and were not limited solely to blue chips, said analysts of Tai Viet Securities Company Penny shares had a solid week, with Sao Vang Rubber Company (SRC) rising 21.5 per cent to VND19,800 per share, recovering from year-long low of VND15,500 on November 16.
Ben Tre Forestry and Seafood Products Import-Export Company (FBT) rose by 17.9 per cent over the previous week, while Seafood Company No.4 (TS4) gained 16.3 per cent.
"The rebound of penny stocks reflects the return of local investors who are seeking profitability after news of a soaring inflation rate and trade deficit and low foreign investment figures," said Nguyen Quang Minh, an analyst with a HCM City securities firm.
The average daily volume of trades on the HCM City market last week was 3.1 per cent higher than in the previous week, reaching 32.5 million shares and an average daily value of VND704.9 billion ($33.6 million).
Sacombank (STB) was the most-active share, with a cumulative total of 7.9 million shares traded during the week.
A profit-seeking trend would continue to stimulate investor interest in the coming week and contribute to a short-term recovery in early December, Minh predicted.
But the head of the brokerage department for a Ha Noi-based securities firm, who asked to remained anonymous, expressed scepticism towards the prospects for a market recovery due to the dismal economic figures.
Credit to stock investors wouldn't be eased anytime soon, he said, and listed companies were struggling against high borrowing costs and dwindling profitablity.
On the Ha Noi Stock Exchange last week, the HNX-Index rose 2.4 per cent over the previous Friday's close to 101.57 points. The average daily value of trades was VND567.6 billion ($27 million), on an average volume of 32.8 million shares, an increase of nearly 25 per cent over the previous week.
HCM City Securities Company analysts also said that rising interest rates were continuing to cast a pall over market sentiment.
"We have now hit bottom for the time being," they wrote, adding that further gains were possible but that economic concerns would act as a drag on share values.
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