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Earnings may boost shares

Update: October, 26/2015 - 07:55

The benchmark VN-Index on the HCM Stock Exchange surpassed 600 points on Friday, the level it last saw on August 12. The Index gained a cumulative 1.5 per cent during the week, closing at 601.74 points. — VNS Photo Doan Tung

HA NOI (VNS) — Analysts are bullish on the market this week, as prospects of positive earnings in the third quarter are expected to continue supporting companies.

"Most third-quarter earnings reports released to date have been good, especially in the building materials, steel and sea transport sectors," said Dinh Van Luong, a broker at the Sai Gon Securities Co's Ha Noi branch.

Meanwhile, the benchmark VN-Index on the HCM Stock Exchange surpassed 600 points on Friday, the level it last saw on August 12. The Index gained a cumulative 1.5 per cent during the week, closing at 601.74 points.

On the smaller exchange in Ha Noi, the HNX-Index increased 0.5 per cent over the week, ending Friday at 81.6 points.

Expectations for higher earnings by banks, insurers, construction and real estate companies attracted heavy investments in these stocks, propping up the market.

Leading firms in these sectors, such as Vietcombank (VCB), Bank for Investment and Development of Viet Nam (BID), Vietinbank (CTG), steelmaker Hoa Phat Group (HPG), insurer Bao Viet Holdings (BVH), real estate giant VinGroup (VIC) and dairy producer Vinamilk (VNM), were the largest gainers.

More companies are expected to report earnings this week and trade will be different among each stock group, depending on their information.

"The market will likely rise further, possibly up to 620 points in the short term, since the VN-Index had remained at around 590 points for several Lai Duc Long, an analyst at Phu Hung Securities Co.

Long said Viet Nam's participation in the Trans Pacific Partnership (TPP) could drive the Government to expand foreign ownership limits faster in the near future. Meanwhile, the plan of the State Capital Investment Corporation to divest investments from large companies, such as Vinamilk (VNM) and FPT Corp (FPT), could also drive up the market and attract more foreign trading.

However, there are still cautious voices, with concerns about low liquidity.

"Liquidity growth is not in line with the Index's rise, so far. To have a breakout, the market needs high-liquidity sessions in at least three or four consecutive days," analysts at Investment Vietnam Securities Co wrote in a report.

Last week, the trading volume decreased on both markets.

The daily market volume in HCM City was down over 10 per cent from the previous week, averaging almost 107 million shares, valued at VND1.9 trillion (US$84.8 million) per session.

The trading volume in Ha Noi also dropped 8 per cent to an average of 40.5 million shares, worth VND465 billion ($20.8 million) per day. — VNS

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