Wednesday, October 21 2020


VN stocks expected to extend week's gains

Update: April, 11/2016 - 09:00
An investor at Bảo Việt Securities in Hà Nội. - VNS Photo Việt Thanh
Viet Nam News -

HÀ NỘI – Vietnamese stock markets may continue their upward trend this week as investor confidence could improve due to stable foreign exchange rates, brokerage firms wrote in their weekly reports.

The benchmark VN Index on Friday inched up 0.1 per cent to close last week’s trading at 572.34 points, rallying three per cent in the past four sessions, while the southern index gained 2.5 per cent during the week.

The HNX Index on the Hà Nội Stock Exchange rose 0.7 per cent on Friday to finish the week at 80.24 points, and the northern index advanced 2.3 per cent in the five trading days of last week.

Investor confidence may be bolstered with a stable foreign exchange rate between the Vietnamese đồng and the US dollar, which has been on a declining trend since the beginning of the year, Bảo Việt Securities Corporation (BVSC) wrote in a report.

Also, the daily reference mid-point rate set by Việt Nam’s central bank for exchange trading noted that bands in local banks fell 0.2 per cent in the first quarter, BVSC said.

The mid-point rate also remained nearly flat during last week’s trading, due primarily to two reasons, BVSC said.

The first is a recently weaker US dollar against other currencies, especially after the US central bank, at its March meeting, said it would carefully review this year’s rate hike plan, the brokerage said.

The other reason is that Việt Nam received more dollar-based income from its trade surplus in the first quarter, as well as a higher proportion of remittances from overseas, which have provided an extra dollar-based supply for the domestic market and eased fears of a weaker đồng in the near future, BVSC added.

In addition, investors may look forward to the meeting this week between some of the Organisation of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and other large producers, including Russia, which is expected to agree on a production freeze to lift oil prices.

Global oil prices last week showed large improvements, after declining sharply on Monday. Both US crude and Brent rocketed in the remaining sessions on sliding US stockpiles and expectations for an output freeze agreement.

US crude West Texas Intermediate (WTI) on Friday surged 6.6 per cent to close the week at US$39.72 per barrel, rising eight per cent from the previous week.

London-traded Brent crude jumped 6.4 per cent on Friday to close the week at $41.94 per barrel, rising 8.5 per cent over the week.

A sharp increase in oil prices last week boosted local energy stocks, including PetroVietnam Gas Corp (GAS), PetroVietnam Mud Drilling Corp (PVC), PetroVietnam Technical Service Corp (PVS) and Petroleum Equipment Assembly and Metal Structure JSC (PXS).

Additionally, the markets might encounter some corrections, as investors seek profits in large-cap stocks that made significant gains last week, such as dairy firm Vinamilk (VNM), steel producer Hoa Sen Group (HSG) and software provider FPT Corp (FPT) on the southern market, as well as VNDirect Securities Corp (VND), Sài Gòn-Hà Nội Bank (SHB) and Sài Gòn-Hà Nội Securities Corp (SHS) on the northern bourse.

Also last week, both local bourses traded nearly 171.5 million shares each session, worth nearly VNĐ2.66 trillion ($118 million), a decrease of 13.6 per cent in trading volume and 9.7 per cent in trading value from the previous week. – VNS

Send Us Your Comments:

See also: