Markets hold steady despite risks
HA NOI — Investors will face substantial risks on the nation's stock market this week despite two consecutive weeks of gains on both stock exchanges, with speculation and lingering doubts about the global financial system adding to the instability.
Speculative trading was heavy last week, reflected in rising trading values and sharp gains among speculative shares and fund certificates, especially securities in construction and real estate, wrote analysts of the financial website vietstock.vn in their weekly report.
The market had a volatile week, reflecting a high level of risk in response to information released during the week and pressures of short-term profit-taking, they wrote.
However, FPT Securities Co analyst Le Thi Bich Hang wrote, "Inflation is tending to slow, interest rates are likely to cool down, and gold is already at a very high level, so profits from gold investments will likely move back to the stock market where share prices are at an attractive range."
Gold prices was also up-and-down last week, at one time falling to around VND45 million (US$2,143) per tael but trading above VND47 million ($2,238) late in the week. (One tael is equal to 1.2 ounces.)
Consumer prices rose by 0.93 per cent this month, compared to July – the slowest rate since September of last year – but still brought the eight-month CPI to 15.68 per cent and the year-on-year inflation rate to over 23 per cent.
The State Bank of Viet Nam took a first step in a bid to reduce interest rates by holding a meeting with representatives of 12 major commercial banks in Ha Noi on Friday. At the meeting, State Bank Governor Nguyen Van Binh said the central bank would apply comprehensive measures to force the banks to comply with the State Bank's cap on deposit interest rates of 14 per cent per year, as well as to reduce commercial lending rates to 17-19 per cent.
Though no specific measures were heard at the meeting, the central bank's reaffirmation of its commitment to reducing lending rates signaled an easing in monetary policies, said vietstock analysts.
On the Ha Noi Stock Exchange last week, despite declining sessions three out of five days last week, the HNX-Index still managed a 2.5-per-cent increase over the previous week, closing on Friday at 69.25 points.
The volume of trades increased by 25.7 per cent to a daily average of 38.3 million shares, while the daily value rose 15.4 per cent to about VND429.6 billion ($20.6 million).
On the HCM City Stock Exchange, the VN-Index closed out the week essentially unchanged from the previous Friday at 404.41 points, despite rising three sessions out of five. The average daily volume rose 29 per cent to 29.6 million shares, worth an average of VND485.4 billion ($23.3 million) per session.
Money moved strongly into speculative shares, helping push VS-Fund certificates up 5.3 per cent, VS-Construction up 4.46 per cent, VS-Securities up 4.25 per cent and VS-Real Estate up 3.18 per cent.
Notable last week was the HCM City People's Court ruling that Vien Dong Pharmaceuticals Co (DVD) would commence bankruptcy procedures, following a motion from ANZ Bank in May. The ruling was issued early in the month but only leaked to the market late last week, once again raising questions about the lack of transparency on the nation's stock market. DVDshares plunged to their floor price on Friday of just VND4,000 per share.
Foreign investors concluded last week as net buyers of a combined VND59.5 billion ($2.9 million) worth of shares on both exchanges, buying a net of VND66.4 billion ($3.2 million) in HCM City but selling a net of VND6.9 billion ($331,700) in Ha Noi.
After reaching the foreign ownership ceiling in software producer FPT, foreign investors were strongly pursuing shares of Saigon Securities Inc (SSI), buying up 2.5 million SSI shares worth VND48.8 billion ($2.3 million). However, the room for additional foreign ownership in SSI is just 1.84 per cent, or 6.4 million more shares. — VNS