HA NOI — The VN-Index last week advanced by 5 per cent over the previous week to close on Friday at 423.43 points. The average daily value of trades on the HCM City Stock Exchange reached VND855.3 billion (US$40.7 million), with heavier buys by foreign investors.
The VN30 Index also added nearly 6 per cent to end last week at 477.77 points.
A number of international financial groups during the past week issued positive outlooks for the Vietnamese market, but many domestic investors continued to suspect foreign funds were planning to divest from the country.
On the Ha Noi Stock Exchange, the HNX-Index also rose by 8.5 per cent over the previous week to close on Friday at 67.07 points. The value of trades averaged VND602 billion ($28.6 million) per session.
"It is worth noting that the trading volume on both bourses rose quite sharply and maintained these levels throughout the trading week," said BIDV Securities Co analyst Hoang Anh Tuan.
A strong rally together with high volumes were often signals of a long-term uptrend, and one would now be supported somewhat by the economic outlook, Tuan said.
"However, in the short term, high volumes also carry the risk of reversing any uptrend when profit-taking occurs or if some negative information destroys investor expectations."
Last week's uptrend spread across the board, with 23 out of 24 sectors advancing. Only pharmaceutical shares dropped by an average of 0.86 per cent. The banking sector rallied strongly with such leaders as Eximbank (EIB), Military Bank (MBB) and Habubank (HBB) rallying on substantial cash flows from foreign investors.
The merger and acquisitions trend in the sector, along with low share prices and restructuring policies, were said to be the main reasons for banking shares to show particular strength.
Late last week, the General Statistic Office announced inflation in February had risen at a rate of 1.37 per cent over the previous month. According to the ministries of Industry and Trade and Finance, the prices of some classes of goods in the 30 days between January 16 and February 14 rose by as much as 6.57 per cent. The ministries have ordered enterprises to keep prices stable and they have allowed some increases in support for some petroleum products from the price stabilisation fund.
Shares of PetroVietnam affiliates performed well last week, with some hitting their ceiling prices during some sessions. On average, these stocks gained 8.36 per cent over the previous week.
Meanwhile, the past month's inflation rate was much lower than in the same period last year, and several major banks have announced a reduction in lending interest rates. "The has positively helped the market," PetroVietnam Securities Co analyst Ngo Hong Duc wrote in a note.
But Maritime Bank Securities Co analysts suggested that the ability of enterprises to access credit remained limited by official policy. To counter that perception, the State Bank of Viet Nam has encouraged credit institutions to improve access to credit for enterprises and has said that it would gather proposals for unfreezing the credit situation for submission to the Prime Minister.
As stock indices rose, sell pressure also increased, said Maritime Bank Securities Co's Tran Quoc Hoan. — VNS