Wednesday, January 22 2020


Indexes move in divergent ways as foreign investors keep selling

Update: August, 18/2014 - 08:33

On the HCM City Stock Exchange, the VN-Index ended last Friday at 604.24 points, losing 0.2 per cent compared to the previous Friday's close.— Photo DTCK

HA NOI (VNS) — The domestic market's two benchmark indexes saw opposite movements at the end of the week, while foreign investors pushed up their net selling.

On the HCM City Stock Exchange, the VN-Index ended last Friday at 604.24 points, losing 0.2 per cent compared to the previous Friday's close. The average value of trades reached VND1.8 trillion (US$84.9 million), gaining 7.8 per cent over the previous week, on a daily volume of 96.87 million shares.

Meanwhile, on the Ha Noi Stock Exchange, the HNX-Index rose 1.6 per cent to 82.23 points, as trading averaged VND774.7 billion ($36.5 million) and 58.7 million shares, increasing some 38 per cent.

Both indexes declined during the first two sessions last week, with selling pressure on large-cap stocks, such as dairy giant Vinamilk (VNM), private equity group Masan (MSN), the Bank for Investment and Development of Viet Nam (BID), insurer Bao Viet Holdings (BVH) and Vietcombank (VCB). The fall in this group of stocks stimulated large scale selling.

Excluding five listed banks, the 30 blue chips tracked by the VN30 Index saw total revenues for 24 companies reaching VND98.3 trillion ($4.6 billion) in the first half of this year, improving 42 per cent compared to the same period last year. However, total net profits decreased 18 per cent to VND69.17 trillion ($3.2 billion).

HCM City Infrastructure Investment (CII) saw the most impressive growth in revenues, soaring 727 per cent. Also, CII, realty shares FLC Group (FLC), Tan Tao Investment (ITA) and logistic firm Gemadept (GMD) recorded outstanding profit growth in the first six months.

On the down side, MSN, Pha Lai Thermalpower (PPC), Phu My Fertiliser (DPM) and property developer Vingroup (VIC) had negative profit growths, falling from – 344 per cent to – 53 per cent.

Meanwhile, lower share prices lured investors back on Wednesday and Thursday. But they could not last until the following session, when the VN-Index declined again and the HNX-Index struggled to add value.

Active trading on shares of PetroVietnam-related companies assisted the northern bourse index, including PetroVietnam Technical Services (PVS), Drilling Mud Corp (PVC), PetroVietnam Engineering Consultancy (PVE) and PetroVietnam Northern Gas (PVG).

Also, foreign investors continued to offload shares, with a net value of more than VND608 billion ($28.6 million). Their selling activities last week did not have a heavy impact on the market, as they concentrated only on some leading shares.

FPT Securities Co' Le Thi Bich Hang predicted that the VN-Index would not overcome its resistance of 610 points. In addition, the market is lacking supportive information. Similar to Hang, other securities analysts advised investors not to add more shares to their portfolios.

For a medium-term strategy, MHB Securities Co's head of brokerage, Hoang Thach Lan, predicted that cash would continue to flow to blue chips in HCM City and penny stocks in Ha Noi. "On the HCM City Stock Exchange, most of the large companies are still earning profits," he explained. Meanwhile, on the northern bourse, low-price shares were suitable for speculative activities and profitable for small investors, he added. — VNS

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