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Financial shares stave off market losses

Update: April, 09/2012 - 10:49

HA NOI — Banking and brokerage shares helped lift indices in the first trading week of April. On the HCM City Stock Exchange, the VN-Index halted its earlier correction and concluded the week at 447.44 points, a slight gain of 0.4 per cent over the previous Friday's close.

Market value of the four-session trading week averaged VND948 billion (US$45 million) per day on an average daily volume of about 65.8 million shares.

On the Ha Noi Stock Exchange, the HNX-Index closed at 74.69, an increase of 0.27 per cent over the prior week. On the northern bourse, the value of trades reached an average of VND729.6 billion ($34.7 million) per session, with around 79 million shares traded per day.

Shares in securities firms were the most noteworthy stocks last week, with the movements of these stocks becoming significant indicators for the entire market. By contrast, investors seemed to be hesitant with real estate stocks in expectations of meagre business results in the sector in the first quarter, although money began to pour into these shares in the final two trading sessions last week.

Late week gains seemed to stem from hopes that interest rate would be lowered.

"In fact, this is not a new expectation, since improved economic conditions have been repeatedly mentioned lately," said analysts for the financial information website vietstock.vn.

Affecting banking shares was word last week that the State Bank of Viet Nam planned to once again amend Circular No 13 which mandates prudent ratios in the operations of credit institutions. The highlight of the draft amendments is the reduction in the credit risk ratio for loans in the real estate and securities sectors from 250 per cent to 150 per cent.

Some commercial banks were also reducing interest rates to improve credit growth. Vietinbank has lowered lending rates to 14-15 per cent per year for businesses in exports, agriculture, support industries and small- and medium-sized enterprises.

Helping keep the market on an even keel, the Ministry of Industry and Trade predicted last week that inflation would remain modest this month, as fuel and food prices began to ease from recent highs.

After a month of extended trading hours, vietstock.vn estimated market liquidity had increased by 30 per cent, but the head of the analysis and investment division of Kim Eng Securities Co, Phan Dung Khanh, said that better liquidity was due to market trends rather than extended trading hours.

"If the market remains bleak, trading all day won't help," Khanh said.

According to Kim Eng data, orders were mainly placed in the morning session, while afternoon trading accounted for only 20-30 per cent of the entire day's orders.

In the coming week, PetroVietnam Securities Co analysts predicted trading would continue to be erratic, as investors waited on additional first-quarter earnings reports. They recommended buys in software developer FPT and real estate companies Vincom (VIC) and Khang Dien House (KDH). — VNS

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