Monday, July 23 2018


ETF portfolio restructuring weighs on shares

Update: December, 16/2013 - 08:56
Investors at FPT Securities in Ha Noi. — VNS Photo Thai Ha

HA NOI (VNS)— The trading of shares last week was mostly affected by the caution shown by traders prior to the restructuring of exchange-traded funds' portfolio.

FPT Securities Co analyst Nguyen Van Quy said, based on the current status of liquidity, that cash has not yet been drawn out of the market. "However, trading has exposed the weakness after last week's slumps."

The market would continue to be affected by the exchange-traded funds' restructuring period and the fourth quarter business results that are still to be announced, he added.

As there would be a great differentiation between stocks, Quy advised investors to accurately judge the stocks by assessing their fundamental values, rather than rumours.

Meanwhile, the VN-Index on the HCM City Stock Exchange lost 0.8 per cent, compared to the previous Friday's close to 506.06 points. The average value of trades reached VND1.46 trillion (US$68.8 million), as trading volume averaged 86.9 million shares per session.

On the Ha Noi Stock Exchange, the HNX-Index advanced 0.2 per cent to 66.22 points, while trading value and volume averaged over VND312.4 ($14.7 million) and 39.3 million shares.

Market indices were boosted during earlier sessions last week by the increase of blue chips, such as private equity firm Masan (MSN), Sacombank (STB), Pha Lai Thermalpower (PPC), Vietcombank (VCB) and insurer Bao Viet Holdings (BVH).

However, selling pressure on speculative stocks remained high. Shares of the real estate, construction and mineral sectors, and the recent rising stars of garment company Mirae (KMR), Viet Nam Ocean Shipping (VOS) and Idico - Petroleum Trading Construction Investment (PXL) were sold off.

This, in turn, created a spreading effect to large-cap stocks, bringing them down, despite strong buying by foreign investors. Foreign investors bought a total net of VND145.4 billion ($6.8 million) last week.

Although FTSE Vietnam ETF decided to add MSN and PetroVietnam Transporation (PVT) to its portfolio, trading on the two stocks did not come up to expectations. The buying of MSN was not as large as expected, while PVT was heavily sold. The PVT price has witnessed a long period of rising, since earlier this year, therefore profit-taking activities were intensive.

Meanwhile, last Saturday, Market Vectors Vietnam ETF announced that it would exclude PetroVietnam Construction (PVX) from its tracking and add a Korean stock, instead. The fund will reduce the proportion of Vietnamese stocks to 70 per cent, from the current 72.61 per cent, beginning next Monday.

Market Vectors Vietnam ETF is holding more than 3.12 million PVX shares worth $3.7 million, equivalent to 0.96 per cent of the fund's net asset value. PVX closed last Friday's session at VND2,300, at only half of the price seen earlier this year.

Also, Sai Gon-Ha Noi Bank (SHB) and Da Nang Rubber (DRC) will be sold to reduce its percentage in the fund. It will reduce SHB from 4.36 to 3.45 per cent, and DRC from 2.49 to 1.86 per cent. — VNS

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