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Foreign investors boost value, volume
The market was boosted by foreign investors acting as net buyers, with value increased throughout the week, which helped the VN-Index to rebound.
The VN-Index on the HCM City Stock Exchange closed last week at 543.59 points, 4.75 per cent higher, while the HNX-Index on the Ha Noi Exchange rose by 2.87 per cent to reach 72.79 points.
Excluding the extraordinary net selling of VND214.5 billion ($10.2 million) of Ha Noi – listed Thieu Nien Tien Phong Plastics Company (NTP), foreign buyers were net buyers of shares valued at VND872.3 billion ($41.5 million).
On HCM City Exchange, foreign investors bought shares with a net value of VND738.3 billion ($35.15 million), mainly of Masan Group (MSN), Vietcombank (VCB), PetroVietnam Fertilisers and Chemicals Corporation (DPM) and Hoa Phat Group (HPG). Real estate giant Hoang Anh Gia Lai (HAG), however, witnessed strong net selling of VND46.4 billion ($22 million).
Also, strong buying from foreign investors helped boost market liquidity.
On the southern bourse, the trading volume averaged 102 million shares with an average trading value of VND1.73 trillion (US$82.38 million). At the beginning of the week's trading, profit-taking occurred, causing many shares to lose. However, foreign buyers of PV Gas (GAS), Sai Gon Securities (SSI) and PetroVietnam Drilling (PVD) helped the VN-Idex to avoid losses.
Buying by foreign investors grew each trading session until the final trading day, with a focus on blue chips. On Thursday and Friday, the VN-Index strongly increased with rates of 1.3 per cent and 1.88 per cent, respectively. Meanwhile, trading value jumped on Friday to reach VND2.32 trillion ($1.1 billion) with many blue chips finishing at their ceiling prices, helping the VN-Index to reach the highest level since 2011.
Hoa Phat Group (HPG) saw the largest gain on the HCM City Exchange last week, increasing 17.2 per cent thanks to the net buying of foreign investors with expectations for improved business results in the fourth quarter last year and for all of 2013.
Although the benchmark index strongly rebounded, the cash flow only targeted blue chips. Many speculative stocks encountered selling pressures, such as those of the real estate and construction sectors.
On the Ha Noi Stock Exchange, the HNX-Index maintained its upward trend to Thursday, though the trend was reversed on Friday as the cash flow shifted to the southern bourse and speculative stocks lost their attraction.
With an average of 303.1 million shares changing hands, the average trading value was VND598.6 billion ($28.5 million). The northern bourse's liquidity remained at high levels.
According to FPT Securities, from the beginning of 2014 to date, foreign investors were net buyers on HCM City Exchange, with a net value of VND803 billion ($38.2 million). This was seen as a positive reaction to information about the increase in foreign stakes.
FPT Securities forecast that the VN-Index would continue to increase this week, as the cash flow would target blue chips, rather than speculative stocks.
Further, the Ha Noi Stock Exchange lost its investors' attraction to the southern bourse and the HNX-Index barely maintained its upward trend.
At the beginning of last week, Deputy Prime Minister Nguyen Van Ninh asked the State Capital Investment Corporation (SCIC) to hasten disinvestments in sectors that did not require State holdings to enhance efficiencies, sending a positive signal to the market.
In 2014, many State-owned enterprises also planned IPOs, such as Viglacera, Viet Nam Airlines and Vinatex, which helped boost supply of the equity market and attract more foreign capital.
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