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Rate cut expectation pushes market up
Expectation of further lending rate decline fueled up investor sentiment on Monday, pushing the VN-Index up a hefty 13.08 points, or 2.75%, against last Friday to close at 488.32.
Viet Capital Securities Company said that the market was thrilled by Vietcombank’s early move to lower deposit interest rates over the weekend, signaling a similar drop in lending rates could soon follow.
Liquidity also sharply expanded with evidence that domestic retail investors had returned to the market after the recent long holiday. On the Hochiminh Stock Exchange, there were nearly 53 million shares worth VND968 billion changing hands, up 101% and 140% from the session earlier respectively.
Property tickers were in the spotlight, advancing 2.4%, as investors speculated some major progress in the Vietnam asset management company (VAMC) plan and the VND30-trillion financing package to support affordable housing program could be released very soon this week, the broker said.
Foreigners were active buyers of MSN, GAS, DPM, REE and KDC, accounting for 15.9% of the buying value and 4.4% of the selling value.
The Hanoi market also made some impressive gains while turnover improved a lot to VND398 billion. The HNX-Index jumped 1.68 points, or 2.84%, and ended the day at 60.74.
HCMC Securities Corp. (HSC) said that the market benefited from a recovery in the Chinese stock market coupled with some domestic news that was received favorably by investors. The market had already received support at key technical levels in previous sessions.
“Today’s move suggests that upward momentum has been restored for the time being. However, our technical analyst sees major resistance at 490 points on the VN-Index and then beyond that level above 510 points also. We thus expect to see a short term trading rally but remain cautious beyond that until we see real movement on key issues. Hence, we would not chase up prices,” HSC said.
Vietcombank Securities Company said that though improvements in liquidity were positive signs, the markets needed more time to retest.
Besides, following the release of PMI (Purchasing Managers’ Index) data, credit growth as of April 23 was made public, posting at 1.4%. This once again confirmed that the economy was in right direction, but the economic recovery still paced slowly.
“The market was still thirsty for good news on considerable improvements in macroeconomic conditions to call for the come-back of strong cash flows. Investors, therefore, should stay prudent,” the broker said.
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