HA NOI (VNS) — Vietnamese investors will be closely watching for signs of policy shifts out of next week's meeting between US President Barack Obama and Chinese President Xi Jinping.
Obama will meet with Xi and a group of powerful Chinese businessmen on Friday amid growing concerns about economic growth in China.
Brokerage FPT Securities Company (FPTS) said in a report Friday that investors should look to pick up stocks that have fallen recently and whose valuations are now more attractive.
FPTS also said that investors should pay attention to companies that have benefited from decreasing production costs as global oil prices have declined since the beginning of this year.
Sectors that depend on imported inputs, such as the transport sector, feature companies such as MHC Company (MHC) and Petrovietnam Transportation Corp (PVT) along with plastics producers such as Binh Minh Plastics Co (BMP) and Thu Duc Electro Mechanical Co (EMC).
Last week, the benchmark VN Index on the HCM Stock Exchange slightly fell 0.1 per cent to close at 566.25 points, while the HNX Index on the Ha Noi Stock Exchange gained 0.3 per cent to end at 77.75 points. Both indices gained 0.7 per cent on Friday.
Trading volume jumped Friday after the US central bank decided to maintain its benchmark interest rate near 0 per cent. The two local markets traded more than 209 million shares, worth VND3.64 trillion ($162 million) – more than twice the market's average trading volume and value in the first four days of last week.
Until the Fed decision, trading had been quiet during the first four trading sessions of last week, averaging 112 million shares traded in each session on both local markets, worth VND1.73 trillion (US$77 million).
The foreign investment funds – the US-based Market Vector VNM ETF (VNM ETF) and the Euro-based FTSE VNM ETF (FTSE ETF) – also had a strong influence on the stock market last week, especially the banking sector, after they adjusted their investment portfolios.
The Bank for Investment and Development of Vietnam (BID) suffered most from the changes in two fund's indices. By the end of the week, BID had fallen 2 per cent from its value in the previous week.
BID gained 14 per cent and was among the most active stocks in the market in the first two sessions of last week after it was added into the VNM ETF's index at the end of the previous week.
However, BID lost more than 14 per cent in the next three days after it was removed from the two investment funds' indices.
Other stocks that were added into the two funds's indices rose such as Petrovietnam Power Nhon Trach 2 (NT2) and Hoang Anh Gia Lai Group (HAG) which gained 5.9 per cent and was up 4.7 per cent, respectively.
In addition, a slightly increasing global oil price helped lift local energy firms. The West Texas Intermediate crude (WTI) was up from $44 a barrel last Monday to $44.68 a barrel on Friday.
As a result, local energy shares such as Petrovietnam Gas Corp (GAS), Petrovietnam Drilling & Well Services (PVD) and Drilling Mud Corp (PVC) were up. They gained 3.2 per cent, 2.9 per cent and 1.5 per cent, respectively. — VNS