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Speculative trading buoys stock market

Update: May, 13/2013 - 10:08
HA NOI (VNS)— Strong speculative trading helped lift shares on both national stock exchanges last week while heavy negotiations trading on bank shares on the HCM City exchange attracted investor curiosity.

On the southern bourse, the benchmark VN-Index gained a cumulative 2.29 per cent during the week, closing Friday's session at 486.10 points, while the VN30 tracking the top 30 shares by market capitalisation and liquidity jumped 2.31 per cent to 551.81 points.

Speculative money flow, driven by news of an interest rate cut and rescue package worth VND30 trillion (US$1.43 billion) for the real estate market, pushed liquidity in the market up strongly.

The trading volume on the HCM City Stock Exchange doubled the previous week's level, averaging 72.3 million shares worth VND1.29 trillion ($61.4 million) per session.

Heavy negotiations trading on the two bank shares, Sacombank (STB) and Eximbank (EIB), was attributed to the rising trading value on the market and drew investors' attention.

More than 72 million STB shares (7.42 per cent of the bank's stakes), worth VND1.56 trillion ($74.3 million), were exchanged via negotiation, while the figure for Eximbank was nearly 43 million shares (3.47 per cent of EIB's stakes), worth VND675 billion ($32.1 million).

While Sacombank's chairman Pham Huu Phu on Friday admitted that the bank had sold shares owned by Dang Van Thanh, the bank's former chairman, to settle its debts, Eximbank provided no information on the huge trading in its shares.

Earlier, Dang Van Thanh and his son agreed to authorise Sacombank to deal with their stakes in the bank (at over 7.43 per cent) to settle the debts related to their family's companies.

On May 20, STB will conclude the list of shareholders who will receive a 20 per cent dividend paid for the first phase of this year (6 per cent in cash and 14 per cent in the form of stocks). There is also a rumour that EIB will likely pay a 5.5 per cent dividend this month.

Though positive trading could be explained by the recent good news for markets, according to many analysts, the rally last week was primarily a short-term uptrend as major problems such as bad debt and poor business results have not improved.

Last week, major banks including Vietcombank, Vietinbank, BIDV and Agribank lowered their deposit interest rates in the short term and by the end of the week, the State Bank of Viet Nam reduced key interest rates and the lending rate by 1 per cent.

"In the mid-term, speculative trading could push the market up or down but macro economic factors have great influence on the stock market in the long term," said Nguyen Tuan, analyst of FLC Securities Co, commenting in the newspaper Thoi bao ngan hang (The Banking Times).

On the Ha Noi Stock Exchange, the HNX-Index also increased 0.24 per cent during the course of the week, finishing Friday's session at 60.48 points.

The market volume jumped up to 116 per cent over the previous week to a daily average of 40.6 million shares, worth VND294 billion ($14 million).

Although the influence of foreign trading was not really clear last week, their net buys still contributed to the positive psychology of domestic investors. Foreign investors picked up shares worth a combined VN551.5 billion ($26.3 million) on both exchanges. — VNS


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