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Strong week bolsters markets
Shares surprised expectations and posted strong gains over the past week, helping dispel some of the gloom that has pervaded the nation's stock markets over the past four months.
The combined volume of trades on both exchanges surpassed VND2 trillion (US$100 million), with over 100 million shares changing hands.
This was a positive sign for the return of money flows, wrote analysts from FPT Securities Co in their weekly report.
"Investors have put more money into their accounts and others have opened new accounts," they noted. "This augurs well for the market to become more bustling this month."
On the HCM City Stock Exchange, average daily volumes reached 45 million shares per day, worth over VND1 trillion per session, and the VN-Index gained over 5.5 per cent over the course of the week to close on Friday at 464.35 points.
Notably, the average volume per session on the Ha Noi Stock Exchange was even higher than in HCM City, reaching 62.3 million changed hands and a value of VND1.16 trillion per session – an increase of 90 per cent in volume and 106 per cent in value over the previous week.
The HNX-Index ended the week up sharply, gaining 14.85 per cent over five session to close at 110.66 points.
One FPT Securities analyst suggested, "Some investors sold shares prematurely, but the market continued to rise against their expectations. Feeling that they had sold out mistakenly, they decided to buy other shares or buy back shares they had sold, but at slighly higher prices. These moves partly explain the strong increase in trading volume."
But Au Viet Securities Company analysts said the logjam on the market had been broken and predicted a strong recovery in the coming week, advising investors to buy shares in such sectors as securities, real estate, banking and finance, transportation and petroleum, as well as shares attracting attention from foreign investors.
Last week, foreign investors were net buyers in HCM City of VND131 billion $(6.2 million) worth of shares but were net sellers in Ha Noi of VND71.6 billion ($3.4 million).
The devaluation of the Vietnamese dong was expected to benefit export sectors such as seafood and rubber, said the director of analysis for Tan Viet Securities Company, Hoang Thi Thanh Thuy.
"On the other hand, industries that import raw materials, such as steel and plastics, both of which rely on imports for 80 per cent of materials, will face greater risks due to the devaluation," said Thuy.
With higher interest rates, sectors relying less on commercial loans, like rubber and transportation, would face fewer risks that heavily financed sectors such as construction materials and metals production, she added.
VNDirect Securities Company set the new resistance mark for the VN-Index in the coming week at 470 points, and at 120 points for the HNX-Index.
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