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Shares gain on rumours of big bank merger

Update: February, 13/2012 - 09:58

HA NOI — Stocks on the HCM City Stock Exchange saw their fourth consecutive week of gains last week, although increased profit-taking held the VN-Index to an overall increase of just 0.8 per cent over the previous Friday's close.

The VN-Index closed out the week at 405.02 points , while the value of trades on the HCM City bourse fell to an average of VND614.6 billion ($29.3 million) per session.

The new VN30 index, in its first trading week, edged up by nearly 2 per cent, concluding Friday's session at 458.23 points.

Sell pressures on the HCM City exchange concentrated in hot stocks such as PetroVietnam Finance (PVF), financial conglomerate Ocean Group (OGC), investment group Tan Tao (ITA) and Becamex Infrastructure (IJC). The market buoyed by foreign investors, who spent a net of around VND400 billion (US$19 million) buying blue chips.

Sacombank (STB) saw five consecutive sessions of gains, soaring by over 17 per cent over the previous week. While financial statements for the fourth quarter of last year, published back on January 31, showed profits up 49 per cent over the same period in 2010 and bad debts down 50 per cent from the beginning of 2011, this was hardly the driving force for the stock last week.

"We believe that the rumour surrounding the merger between Sacombank, Eximbank and Asia Commercial Bank had an active impact on speculation in STB shares," said analysts for the financial information website "This makes a lot of sense, since the buy orders mainly came from domestic investors."

Foreign investors, meanwhile, sold a net of over VND23 billion ($1.1 million) worth of STB shares.

Bank shares also rose on the Ha Noi Stock Exchange last week, with Habubank (HBB) and Sai Gon Ha Noi Bank (SHB) seeing dramatic trading volumes during the week.

The HNX-Index closed up 1.36 per cent over the previous week's close to 62.69 points, while the average daily value of trades rose to VND354.4 billion ($16.87 million), a 24-per-cent increase over the previous week.

VNDirect Securities Co (VND), PetroVietnam Construction (PVX), PetroVietnam Power Land (PVL) all saw heavy sales.

At mid-week, SME Securities Co (SME) was again fined for failing to settle its transactions. In response to the increasing difficulties seen by brokerages across-the-board due to the prolonged market downturn, the Viet Nam Association of Financial Investors (VAFI) asked the Prime Minister and the Ministry of Finance to reduce the number of securities firms from the current 100 to about 25, calling this a critical measure in the medium term.

In the coming week's trading, some reliable technical signals were showing a likely decline, said PetroVietnam Securities Co analyst Ngo Hong Duc. "Investors who are holding cash should stay out of the market, while others would be better off reducing the proportion of shares in their portfolios," he said.

Vietstock analysts said money could be poured this week into sound shares which were not showing drastic movements, or shares in sectors expected to grow throughout the year, such as agriculture, seafood, petroleum and mining stocks.

Towards the end of the week, investor attention will shift towards monthly inflation data for February, with aftereffects of the lunar new year holiday expected to push the one-month increase in consumer prices to as high as 2 per cent. — VNS

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