Monday, August 20 2018


Shares fluctuate on mixed data, tardy trading

Update: April, 01/2013 - 10:22

HA NOI (VNS)— Mixed news saw shares fluctuate throughout the course of last week, with shares closing in the green on the HCM City Stock Exchange, despite sluggish trading reflecting the continued mood of caution among investors.

The benchmark VN-Index on the southern bourse gained a modest 0.21 per cent over the week, closing Friday at 491.04 points, but the trading volume declined 18.6 per cent, averaging 41.8 million shares, worth nearly VND799 billion (US$38 million), per session.

News of an interest rate cut early last week helped the market open in the green but the rise was not strong enough to last as long as expected.

According to many analysts, the impact was rather weak because most investors already knew about the move on the rate cut before it was officially announced. In addition, the rate cut this time does not suggest improved access to loan capital.

"Adjustment of large-cap stocks also restricted the market's uptrend," stock analysts on the financial website said.

The VN30 tracking the top 30 shares on the HCM City market was down 0.46 per cent during the week, standing at 552.28 points.

Meanwhile, the HNX-Index on the Ha Noi Stock Exchange lost 1.12 per cent to finish the week at 60.25 points. Trading volume also fell 8.4 per cent to an average of 33 million shares, worth VND255.3 billion ($12.2 million), per day.

Data showing that the petrol price rose to a record high of VND24,580 ($1.17) per litre negatively affected Friday's session, sending both indices into the red. Though the market improved towards the end of the session, low liquidity reflected investors' caution.

According to the Ministry of Finance and the Ministry of Industry and Trade, the price hike was due to the exhaustion of the national petrol price stabilisation fund.

"In our assessment, the increase of 6 per cent in the petrol price will directly affect transport fees, which is forecast to contribute about 0.3 per cent to the overall increase in the CPI in the coming months," Pham Tien Dung, analyst of Bao Viet Securities Co, commented in a report.

However, due to the weak consumption demand of the economy, Dung forecast the CPI in April would rise by about 0.5-0.8 per cent.

"Many domestic investors were concerned about the price hike's impact on the market, especially in the context that the market is facing many difficulties to form an uptrend," he said.

With the news that the Government has yet to give final approval to the new national asset management plan at its regular meeting on Friday, the market is expected to continue fluctuating in a narrow band.

"We think the information related to corporate earning results will attract more attention from investors. In that context, the divergence among stocks will continue, and cash flows will run into companies in consumer goods, and the oil, gas and securities sectors due to their solid earnings prospects," Dung said.

Foreign investors continued to express their confidence in the domestic market, concluding last week's trading as net buyers on both exchanges. They picked up shares worth a combined VND265.2 billion ($12.6 million). — VNS

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