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VietNamNews

Friday rally halts last week's downturn

Update: June, 18/2012 - 09:49

HA NOI — Thanks to Friday's rally, the VN-Index closed the week up by 0.14 per cent over the previous week's close, reaching 433.09 points. Meanwhile, the daily value of trades on the HCM City Stock Exchange during the past week averaged VND1.1 trillion (US$52.2 million), a decline of 36 per cent from the prior week.

The VN-Index shrank for the first four days of the week, only to post impressive gains on the final trading day thanks to recovering US stocks.

Late last week, Deputy Prime Minister Nguyen Xuan Phuc also said the domestic economy had overcome its most difficult period. In the first half of the year, economic growth was estimated at 4.3 per cent, while the number of enterprises falling into insolvency in May fell by 10 per cent compared to the average of the first four months of the year. Inventories have also been trending downward each month between March and May.

National Assembly Chairman Nguyen Sinh Hung reaffirmed, "The National Assembly has targeted 6-per-cent growth and inflation below 8 per cent, so all necessary measures will be implemented to achieve this goal."

The economy would recover in the second half of this year, predicted FPT Securities Co analyst Nguyen Van Quy, noting the Government's determination to restructure and reduce bad debt levels within the banking system.

During Friday's session, foreign investors also increased both sell and buy orders, although they were net sellers by a margin of 10 million shares.Their trades focuse on Sacombank (STB), Refrigeration Electric Engineering Corp (REE) and PetroVietnam General Services Corporation (PET) – activity believed to be related to changes in the shares used to calculate the FTSE Viet Nam Index.

The VN30 Index, tracking the city's leading stocks by capitalisation and liquidiy, declined somewhat during the course of the week, closing on Friday at 507.94 points.

However, foreign investors continue to buy in other blue chip shares. "If they continue to sell only within a few codes, it's a good sign," said PetroVietnam Securities Co analyst Ngo Hong Duc.

On the Ha Noi Stock Exchange, the HNX-Index retreated by nearly 1.3 per cent from the prior week's close to 74.84 points. Trading was sluggish, with an average daily volume of 46.3 million shares, worth an average of VND483.6 billion ($23 million) per session.

Viet Nam Investment Securities Co analysts warned in their weekly report, "Investors should be patient in observing market movements and should not rush to buy this week." They predicted that HNX-Index would see a horizontal trendline between 70-80 points before giving clear signs of a new trend.

"Positive technical signals will appear only when the VN-Index exceeds 440 points and the HNX-Index moves beyond 76 points, accompanied by a strong improvement in liquidity," said Duc. — VNS

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