|The benchmark VN-Index on the HCM Stock Exchange posted a cumulative increase of 0.24 per cent last week, despite losing sessions outnumbering sessions that finished ahead by three-to-two. — Photo TNCK
HA NOI (VNS) — The current uptrend is expected to continue this week as cash flows in the market remain positive, many stock analysts predict.
The benchmark VN-Index on the HCM Stock Exchange posted a cumulative increase of 0.24 per cent last week, despite losing sessions outnumbering sessions that finished ahead by three-to-two.
Further, large-cap stocks fluctuated during the week, but ended in green by the end of the week with the VN30, the tracker of the top 30 shares by market value and liquidity, rising 0.7 per cent to finish at 622.75 points.
Also, liquidity improved substantially on rising investors' optimism with the market's outlook. The daily trading volume grew 30 per cent, compared with the previous week, averaging 111.2 million shares, worth VND1.953 trillion (US$91.3 million) per session.
The market finished in the red on Friday as investors reacted negatively to information that electricity prices will rise by 7.5 per cent to an average VND1,622.05 per kWh, starting March 16.
Meanwhile, electricity utilities stocks were the largest gainers after the information was released. Thac Mo Hydro Power (TMP), PetroVietnam Power Nhon Trach 2 (NT2), Thac Ba Hydro Power (TBC) and Vinh Son-Song Hinh Hydro Power (VSH) saw significant growth of 2 to 4.7 per cent.
This movement was similar to the development of these stocks when Electricity of Vietnam (EVN) increased electricity prices in the past.
According to analysts at Viet Dragon Securities Co (VDS), the electricity price increase will not improve profit margins of power companies because selling prices were previously specified in contracts with EVN before the price hike.
However, production costs of many companies operating in the cement, steel, fertilizer and chemicals sectors will see sharp increases of some 10 to 20 per cent.
Further, the power price hike is expected to cause upward pressure on the consumer price index (CPI) in April. However, VDS's analysts believe the probable inflation growth would not be a problem, since the current inflation rate is relatively low. (CPI in February fell by 0.11 per cent against the previous month).
On the Ha Noi Stock Exchange, the HNX-Index also added 1.18 per cent during the week, ending Friday's session at 86.79 points.
Trading expanded here as market volume rose 14 per cent over the previous week, averaging 45.2 million shares, worth VND579.4 billion ($27.1 million) per session.
According to analysts at Maybank Kim Eng Securities Co, the market is expected to remain in an uptrend in the short term. Despite a fall on Friday, the selling pressure was not strong while trading volume stayed above the average of the last 10 sessions, which showed cash flows in the market were still quite positive.
Another positive sign was strong purchasing from the foreign sector. Foreign investors concluded last week as net buyers on both stock exchanges, responsible for a combined net buy value of VND235 billion ($11 million).
Additionally, analysts expect movements by foreigners will continue to influence the market this week, involving trading in shares related to portfolio reviews of exchange-traded funds. — VNS