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ETF restructuring delivers mixed results
The benchmark indices went in opposite directions on both national exchanges last week, as the market witnessed an improved liquidity after some exchange-traded funds (ETFs) completed restructuring of their investment lists.
On the HCM City Stock Exchange, the VN-Index closed the week 0.3 per cent lower at 504.45 points, while the HNX-Index on the northern bourse gained 1.9 per cent to 67.5 points.
According to Vietstock.vn, the restructuring of the investment lists of two ETFs did not have a large impact on the market last week. However, investors showed caution, which resulted in low liquidity levels during the start of the trading week.
The domestic petrol price hike on Wednesday did not seem to affect the market significantly, and liquidity improved on the last two trading days of the week as the ETFs completed their restructuring.
On the northern bourse, the trading volume averaged 90.411 million shares, with an average trading value of VND1.473 trillion (US$70.14 million).
The trading value reached a high level on Friday, as 142.42 million shares were traded at a total value of VND3.03 trillion ($144.7 million), which is twice the average of the bourse's weekly trading value.
The VN-Index managed to increase on Tuesday and Thursday, but the increases failed to support the benchmark index to close higher at the end of the week.
On the northern bourse, an upward trend was maintained until Thursday, but the trend reversed on Friday. An average of 316.628 million shares changed hands, while average trading value was VND483.07 billion ($23 million).
During the past trading week, there were signs of recovery in speculative stocks from the real estate and construction sectors, such as the FLC Group (FLC), An Duong Thao Dien Real Estate (HAR), Viet-Han Corporation (VHG), Petroland (PTL) and Hoang Quan Real Estate (HQC). These stocks witnessed strong increases during the week and attracted cash investments from investors.
Foreign investors took turns at being net sellers and net buyers during the past week. On Friday, in particular, foreign investors became net buyers of shares valued at VND735.5 billion ($35.02 million), in particular, strongly buying shares of Vinacafe Bien Hoa (VCF).
HCM City-listed real estate giant Vingroup (VIC) lost up to 7 per cent last week. According to Vietstock Finance, the decline was due to the net selling of a total of VND63.8 billion ($3.038 million) by foreign investors as a result of the ETFs' restructuring.
According to FPT Securities, the restructuring of the ETFs generated strong selling pressure for bluechips on Friday, causing the benchmark indices to decline on both the national stock exchanges.
Real estate sector stocks were in the limelight last week, according to Bao Viet Securities, which noted there were no signs, however, that the trend would continue over the long term. It added that opportunities only existed for real estate companies that successfully implemented debt restructuring schemes.
Bao Viet Securities also forecast that stocks of gas companies and securities firms would be potential leaders of the next wave of stock gains.
The US Federal Reserve's move to taper its stimulus package by $10 billion a month to $75 billion is forecast to benefit Viet Nam's economy in the long term since it is a large trading partner in general, and the stock market, in particular, through foreign capital inflows, according to stock analysts.
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