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Securities stocks rebound on improved liquidity, demand

Update: January, 18/2014 - 09:54
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HA NOI (VNS)  — After a long period of sluggish trading, the share prices of securities firms have increased during recent sessions.

Demand for these shares has surged thanks to a recovery of the overall stock market and a possible rise in the limits of foreign ownership of equity shares.

The shares of companies, such as Saigon Securities (SSI), HCM City Securities (HCM), VNDirect Securities (VND) and Bao Viet Securities (BVS), jumped between 4 and 16 per cent this week.

VietCapital Securities Co's head of brokerage, Chau Thien Truc Quynh, told Dau tu chung khoan that the recent profits of securities companies have helped their stocks rally.

In addition, an anticipated policy to extend the foreign ownership in listed firms had a positive impact, especially in stocks where the foreign investor holdings had reached their permissible limits, such as SSI and HCM.

Notably, VND rose 7.7 per cent on Wednesday after it announced a partnership with a Singaporean company.

According to Military Bank Securities (MBS), around half of the listed brokerages achieved their profit targets, with SSI, HCM, VND, BVS and Kim Long Securities (KLS) ranking among the top earners.

Companies that did not perform well in the previous year are also expected to return to profit this year.

"This is a vital element that will reinforce investor confidence in the shares of securities firms, as they expect the market, in general, will prosper this year," said MBS head of strategy Trinh Xuan Son .

Shares of local securities firms have low market prices and good liquidity, making them appealing investments, especially for the short term, he added.

Data on the past 10 trading sessions showed that trading volumes of these codes jumped 30-60 per cent compared with the average gains in the previous month.

"Theoretically and practically, the fluctuations in these shares are aligned with the general movements of the stock market," Son said.

Given that the equity market is expected to gain in 2014, these shares are also forecast to witness an increase in prices. — VNS

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