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VietNamNews

Investor caution keeps trades low

Update: August, 04/2014 - 08:58

A transaction at Vietcombank Securities Co (VCBs) in Ha Noi. Both bourses last week witnessed falling liquidity reaching alarmingly low levels. — VNS Photo Truong Vi

HA NOI (VNS) — Shares ended lower with sluggish trading on both national stock exchanges last week as investors displayed a cautious psychology due to their receiving mixed information.

The VN-Index on the HCM City Stock Exchange lost an accumulative 1.04 per cent to end Friday's session at 593.9 points, while the HNX-Index on the capital city's bourse dropped 0.52 per cent to 79.01 points.

Both bourses witnessed falling liquidity reaching alarmingly low levels, according to VietstockFinance, with trading volume by matching having declined 17.4 per cent over the previous week, to 361.2 million shares on the southern bourse and 15.1 per cent, to a modest 174.7 million shares on the northern exchange.

An average 76.9 million shares were traded per session, at an average trading value of VND1.39 trillion (US$65.5 million) on the HCM City Stock Exchange, respectively 17 per cent and 12 per cent lower than the previous week.

The average trading value on the Ha Noi Stock Exchange fell by 25 per cent to VND421 billion ($19.8 million) on the exchange, at an average 36.3 million shares per day.

Also, large-cap stocks largely affected the benchmark indices' gains or losses last week.

The market showed little reaction to recent petrol price cuts, opening last week with losses after a sell-off occurred on a large scale before rebounding on Tuesday.

Stock analysts said the gains on Tuesday were only a technical rebound, as the benchmark indices were mainly reliant on blue chip stocks to post gains and trading remained sluggish during the session.

Additionally, the news that Moody's raised Viet Nam's credit rating did not have a large impact on the market, as trading remained sluggish with low liquidity through Friday. Even Thursday's news that the benchmark indices, fuelled by blue chips, had ended higher did not have an impact on the market.

Also, foreign investors finished as net buyers of VND92 billion ($4.4 million) on both bourses last week, if the net selling of VND475 billion ($22.4 million) of Vingroup (VIC) was excluded.

On the HCM City Stock Exchange, foreign investors bought into Hoa Phat Group (HPG), Sacom Investment and Development Corporation (SAM), World Mobile Investment Corporation (MWG), PetroVietnam Drilling Corporation (PVD), Bao Viet Holdings (BVH) and PetroVietnam Gas Corporation (GAS), while selling VIC and Masan Group (MSN).

Many stock analysts provided negative technical views of the market this week, saying that the benchmark indices might continue to fall.

Ban Viet Securities noted that both benchmark indices would challenge 580 points and 77.5 points this week, warning investors to reduce buying activities while lowering the holdings of stocks in their portfolios.

According to Bao Viet Securities, technically, the market rebound was of a low possibility, saying that the market might encounter losses or end flat this week, regardless of gains from blue chips.

Stocks would continue to be divided by corporate earnings to be released during this week. However, the impacts would not be huge, according to Tran Duc Anh, a stock analyst from Bao Viet Securities. — VNS



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