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Slowing declines offer faint hope of renewed rally
On the HCM City Stock Exchange on Friday, the VN-Index closed at 437.38 points, losing 2.4 per cent from the previous week and representing a slower pace of declines than the market has posted in recent weeks.
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Source: VietstockFinance
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The VN30, tracking the exchange's 30 leading shares by market capitalisation and liquidity, meanwhile managed to rise by 1.9 per cent over the previous Friday to 514.27 points.
The average daily value of trades on the HCM City bourse last week totalled about VND1.2 trillion (US$57 million), a decline of 17.2 per cent from the prior week.
On the Ha Noi Stock Exchange, the price volatility of the HNX-Index also appeared to be declining. The Index ended the week at 76.06 points, down just 1 per cent from the previous Friday. Trades were sluggish, however, average just VND546.4 billion ($26 million) per session.
Analysts for the website vietstock.vn estimated that the below-average volume of trades indicated little success or interest in bottom feeding. "This means that, if the market continues to rally next week, the pressure of profit-taking is not too high," they wrote in a note.
Investor psychology became more optimistic late last week, they added, as economic news turned more positive. Inflation returned to a single-digit pace during May and was is expected to further decelerate in the coming months.
"An additional 1-2 per cent reduction in interest rates is also entirely possible to promote the process of easing credit," they added.
If volumes this week in HCM City can keep above 50 million shares a session, investors could hope for another short-term rally, they said.
vietnamnews
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