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Vincom deal helps ignite markets
Shares of real estate developer Vincom took off on Friday, giving a boost to stocks on the HCM City Stock Exchange – while new measures by the State Bank of Viet Nam to keep interest rates in check also pleased investors.
Vincom transactions clearly dominated the market on the day, said an analyst from HCM City Securities Company, as foreign investors bought up over 18 million shares in three subsidiaries of Vincom, worth a total of VND1.58 trillion (US$75 million).
These subsidiaries had already announced their intention to sell the shares several days earlier, the analysts said, explaining that the parent company had held a large number of treasury shares in its subsidiaries.
Replacing them with cash was a big plus in terms of reducing risk for the group, they said, adding that the sale was a vote of confidence by foreign investors in a major Vietnamese stock – following several similar but smaller debt or equity deals in recent months involving Hoang Anh Gia Lai (HAG) and Masan Group (MSN).
Foreign investors continued as net buyers on the domestic markets throughout last week, buying a net of 24.6 million shares over the course of five sessions. US-based Investment U said that foreign investors were eyeing Viet Nam's stock markets again now that share prices had fallen so low.
Sacombank Securities Company Chairman Nguyen Ho Nam also told Saigon Times that two foreign investment funds had opened trading accounts with the company, with funds estimated at $400 million already awaiting investment in a HCM City-based commercial bank once the foreign exchange rate had stabilised.
Meanwhile, on Wednesday of last week, the State Bank of Viet Nam set up a team to audit deposit interest rates at commercial banks. In response to the move, 12 commercial banks agreed last Thursday to a mandatory cap on deposit rates of 15 per cent.
Central bank supervision helped settle down concern that capital would flow away from the securities market and towards banks, commented Tran Quang Vinh, an analyst with a Ha Noi-based securities company.
"As a result, Thursday's session witnessed a strong bounce with blue chips soaring," Vinh said.
The VN-Index ended the week on Friday at 473.06 points, a rise of 1.88 per cent over the previous week's close.
The average daily volume of trades on the HCM City Stock Exchange rose 42.4 per cent over the previous week to 81.1 million shares, with an average value of VND2.1 trillion ($100 million).
Saigon Securities Inc (SSI) was the week's most-active share, with 27.9 million traded, followed by shares of real estate developer Vincom (VIC) with 19.5 million.
On the Ha Noi Stock Exchange, the HNX-Index closed off 0.23 per cent to 116.39 points. Volume averaged 71.6 million shares a day, rising 14.7 per cent over a week ago and totalling a value of VND1.4 trillion ($66.7 million).
Vinh said that investors hd begun leveraging trades again, which could ingite a rally but also increase volatility. "Investors should be wary of heavy profit-taking this week," Vinh said.
Analysts of Woori CBV Securities Company said that it was feasible for VN-Index to reach 486 points if purchasing power remained strong.
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