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VietNamNews

Stocks up on foreign investors' purchases

Update: December, 30/2013 - 08:30

HA NOI (VNS) — Domestic stock indices went up slightly last week, boosted by economic recovery and ongoing buys by foreign investors.

Photo cafef

Viet Nam's gross domestic product (GDP) growth of 5.42 per cent in 2013 was lower than expected, but higher than the growth rate of 2012, according to annual economic data released last week.

The data also showed that the country attracted US$21.6 billion in foreign direct investment in 2013 and boasted a trade surplus of $863 million.

As of December 27, credit had expanded 11 per cent. However, around 17 per cent of the country's credit institutions reported losses this year.

The Viet Nam Asset Management Company bought VND36 trillion ($1.7 billion) worth of non-performing loans (NPL). In HCM City, commercial banks reported total profits of VND5.5 trillion ($259.4 billion) and an NPL rate of 5.5 per cent.

Although more than 100 institutions reported profits, half of them posted a 50 per cent decline in profits compared with 2012.

In the stock market, the VN-Index on the HCM City Stock Exchange ended last week 0.4 per cent higher, at 506.41 points. The trading value averaged more than VND1.2 trillion ($56.6 million), which represented a 17 per cent decline from the previous week's level.

On the Ha Noi Stock Exchange, the HNX-Index added 0.6 per cent compared with the previous Friday's close, to finish at 67.93 points. The average value of trades per session was VND450.9 billion ($21.2 million), lower by 6.7 per cent from a week ago.

Blue chips were favoured, in particular, were shares of steelmaker Hoa Phat (HPG), which were mainly bought by foreign investors. The scope for foreign ownership in the company has reduced to a mere four per cent after last week's trading.

Private equity group Masan (MSN) and Vinacafe Bien Hoa (VCF) were also eyed, while shares of property developer Hoang Anh Gia Lai (HAG), Vietinbank (CTG), Eximbank (EIB) and Sacombank (STB) were sold heavily by investors.

Hong Kong-based investment fund GaoLing acquired 23.13 per cent of Vinacafe Bien Hoa. YHG Investment, a GaoLing-related institution, also purchased a 1.13 per cent stake in the coffee processor. The transaction values VCF shares at VND135,000 ($6.3) per unit.

According to the latest data, by the end of last week, foreign investors bought a net total of $315 million in 2013. This figure does not include investments in the private equity sector and unlisted companies.

Market Vectors Vietnam ETF and FTSE Vietnam UCITS ETF were the two exchange-traded funds that helped to raise money from international investors.

In addition, the US Federal Reserve's quantitative easing measures, effective until the year-end, encouraged cash flows into emerging markets, such as the Philippines, Indonesia and Viet Nam.

The Ha Noi Stock Exchange announced last week that it expected to complete a trading mechanism for exchange-traded funds by the first quarter of next year. It has already finalised a draft regulation on the establishment and management of exchange-traded funds, which will be submitted to the State Securities Commission.

The exchange also hopes to develop the derivatives market by the second quarter and a bond index by the end of next year.

While blue chips were boosted by investor buying, selling pressure weighed on speculative stocks in the real estate and construction sector, including those of the FLC Group (FLC), An Duong Thao Dien (HAR), Vietnam Mechanisation Electrification and Construction (MCG), FeCon Foundation Engineering and Underground Construction (FCN), Tan Tao (ITA), Becamex Infrastructure (IJC) and Vietnam Electricity Construction (VNE). — VNS

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