More foreign selling threatens local shares

Update: November, 21/2016 - 09:00
Investors watch shares move on the trading platform of Artex Securities Company. Foreign selling could send local stocks down this week. — VNA/VNS Photo Thanh Nga
Viet Nam News

HÀ NỘI — Foreign traders have increased selling in local securities markets and could threaten the future outlook, which has remained at 665-675 points since the beginning of the month.

The benchmark VN-Index on the HCM Stock Exchange was down 0.9 per cent last week, ending Friday at 673.3 points. It had gained 1.9 per cent in the previous session.

On the Hà Nội Stock Exchange, the HNX-Index saw a second weekly loss, decreasing 0.7 per cent for the week at 80.6 points. It had given up 1.5 per cent in the first half month.

Foreign investors concluded last week’s trading as net sellers on both exchanges, offloading total net value of nearly VNĐ600 billion (US$26.8 million), a two-fold increase over their net buy value over the past month.

Their sales focused on large-cap stocks, including dairy firm Vinamilk (VNM), real estate developer VinGroup (VIC), steelmaker Hòa Phát Group (HPG), Masan Group (MSN), insurer Bảo Việt Holding (BVH) and Sài Gòn Securities Inc (SSI).

Eight of the top ten selling stocks were among the top 30 largest shares by market capitalistaion on the HCM Stock Exchange.

“This is a short-term risk that investors need to take into account,” Trần Hải Yến, a stock analyst at Bảo Việt Securities Company, wrote in a note.

For the possibility that the US Federal Reserve (Fed) could hike interest rates soon, which the Fed’s chairwoman, Janet Yellen, has suggested, could trigger stronger net selling by foreign investors.

“The interest rate increase will have certain influences, which may lead to the withdrawal or net selling of foreign funds in the Vietnamese stock market,” Yến said.

The possibility that ‘rate hikes are on the horizon’ is having impacts on prices of the US dollar, gold and energy products.

The greenback is strengthening against other currencies, while gold prices have fallen to the lowest levels in the past five months.

Oil saw its first weekly gain since mid-October, following the prospect that the Organisation of Petroleum Exporting Countries (OPEC) would soon agree on a common production cut to support global oil prices.

Also, West Texas Intermediate (WTI) crude oil increased 0.6 per cent on Friday to $45.69 per barrel, while Brent crude was up 0.8 per cent to $46.86 per barrel.

In the local market, most large-cap stocks, even energy shares, saw negative movements, but shares of commodities, such as steel, rubber and mineral, have risen thanks to strong price rises on the global markets.

Mineral producers KSH Investment & Development (KSH) and Bình Thuận Mineral Industry (KSA), and steelmakers such as Hòa Phát Group (HPG) and Tiến Lên Steel (TLH), were among the biggest gainers last week.

According to many brokerage firms, the market is moving in a narrow band of around 665-675 points, which has lasted since the beginning of November. Investors are seeking to hold their current stock exposure, while awaiting clearer signals. – VNS