Friday, September 22 2017

VietNamNews

Market rallies as VAMC moves ahead

Update: May, 27/2013 - 10:05

HA NOI (VNS)— The market was buoyed by general confidence and the information that the national asset management corporation (VAMC) would be officially operational in July with shares showing robust growth on both stock exchanges last week.

The benchmark VN-Index on the HCM City Stock Exchange gained a cumulative 2.6 per cent during the week, finishing Friday at 500.24 points, while the HNX-Index on the Ha Noi Stock Exchange climbed 3.6 per cent to a close on 62.61 points on Friday.

Selling pressure increased towards the end of the week as many investors sought quick profits but strong market confidence helped absorb those shares.

The trading volume on the southern bourse increased over 60 per cent over the previous week, averaging 69.3 million shares worth nearly VND1.16 trillion (US$55.2 million) per session.

On the northern market, the volume of trades jumped 82.5 per cent compared with the previous week, totalling 49 million shares worth almost VND409 billion ($19.5 million) per day.

Increased liquidity along with both indices surpassing their short-term technical barriers was consolidating investor confidence that cash flows were returning to the market. However, many analysts warned that the current rally would not be as strong as expected.

According to Nguyen Tuan, head of the FLC Securities Co's analysis department, the market rises last week were supported by the information of the VAMC establishment in July but, because all the terms related to its operation had already been discussed and reflected in previous uptrends, this information would not affect the market as strongly as might otherwise have been expected.

"The market shows signals of short-term profit taking but not in a massive way. The foundation of the current rally is quite good so the price rises will not likely stop in the near future, but accompanied with several declining sessions," Tuan said.

Nguyen The Minh, an analysis of Viet Capital Securities Co, said: "The market tends to rise in a narrow band. The VN-Index could reach its next short-term support level of 520 points and the HNX-Index 65 points. However, the market may experience a few corrections to test demand at new support levels."

Minh said exchange-traded funds would restructure their porfolios in July and the increases or decreases in the number of shares in their investment baskets would affect the market.

Foreign sectors continued to conclude last week as net buyers on the two markets but their buys fell sharply compared with previous weeks. According to many analysts, foreign investors also increased their sales to realise cash profits as they were net sellers in the last two sessions.

They were responsible for a net buy of just VND8.3 billion ($395,000) worth of shares on the HCM City market, focusing on blue chips like steelmaker Hoa Phat Group (HPG), PetroVietnam Drilling and Well Services (PVD) and Southern Rubber Industry (CSM).

They also picked a net buy of VND20.7 billion ($986,000) worth of shares on the Ha Noi Market, favouring speculative stocks like NET Detergent (NET), PetroVietnam Drilling Mud (PVC) and Sai Gon-Ha Noi Bank (SHB). — VNS


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