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VN stocks up for second day
Vietnamese shares extended growth for a second day on higher investor confidence but modest trading liquidity is hindering the chance of further improvement.
The benchmark VN Index on the Ho Chi Minh Stock Exchange gained nearly 1 per cent to close at 889.64 points.
The southern market index was up 0.31 per cent on Friday but fell total 1.3 per cent last week.
The HNX Index on the Ha Noi Stock Exchange added 1.07 per cent to end at 101.93 points, extending its gain from a 0.32 per cent growth on Friday.
The northern market index dropped total 3.25 per cent last week.
The recovery of US stocks on Friday to regain all losses a day before was the reason for Vietnamese stocks to grow for a second day on Monday, according to Bao Viet Securities Company (BVSC).
Better-than-expected unemployment rate and Fed chairman’s comments soothed the monetary policy seemed to have “positive impacts on Viet Nam’s stock market, especially when the VN Index is in the support zone of 880 points,” BVSC said in its daily report.
“The Fed chairman’s comments last weekend clearly calmed investors down and lifted off their fears of a faster rate hike plan in 2019,” Sai Gon - Ha Noi Securities JSC (SHS) said.
In addition, the rally of oil prices was another factor that bolstered the market sentiment.
That rally came from expectations for eased tension between the US and China, boosting the global trade.
Brent crude gained strongly 2.2 per cent to trade at US$58.35 a barrel on Monday. It has shot up 15.6 per cent since Christmas.
The rally of oil prices benefited local petroleum stocks such as PetroVietnam Gas (GAS), PetroVietnam Drilling and Well Services (PVD), and PetroVietnam Technical Services (PVS), which gained at least 2.1 per cent.
The petroleum sector index was also among the best performers of 20 indices on the Vietnamese stock market, data on vietstock.vn showed.
Other industries that ended on a positive note included banking, retail, consumer staple and pharmaceutical.
However, Monday’s growth doesn’t mean the stock market has completely got out of its downtrend and what is weighing on investors now is low liquidity, which “indicated investors’ caution and hesitation in trading amid the market’s fluctuations,” BVSC said.
“This could be a short-lived recovery.”
More than 182 million shares were traded on the two exchanges, worth VND3.66 trillion ($160 million).
“Low liquidity proves a majority of investors choose to stand by the market for observation. Meanwhile, they are willing to offload stocks at high price levels when the VN Index is near 900 points, raising the risk for a downturn of the market,” SHS said.
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