Market rallies sharply on foreign investor interest
Busy trading, buoyed by increased foreign-investor interest and gains on world markets, helped domestic stock indices advance significantly last week.
The movement came despite unfavourable economic data issued during the week, including sluggish growth figures and a plunge in foreign direct investment in the first quarter.
The VN-Index rose a cumulative 20.79 points during the week to close on Friday at 287.41, a rise of 7.8 percent over the previous Friday\'s close.
Trading volumes averaged 24.8 million shares per day, up 15 percent over the the previous week\'s average. Average daily turnover was VND532.8 billion (US$31.3 million), an increase of 28 percent.
Major stocks like Hoa Phat Group (HPG), Phu My Fertilisers (DPM) and Refrigeration Electrical Engineering (REE) returned to being among the most active stocks, redirecting the market.
Tourism, and entertainment shares gained the most on the week, according to FPT Securities Co data increasing 16.31 percent on average, followed by chemicals shares, up 16.28 percent, and natural resources, up 12.53 percent.
Telecommunications shares dropped the sharpest, sliding 0.43 percent, while automotive and insurance shares were each off about a twentieth of a percent.
Foreign investors were active throughout the week, responsible for 27.7 million trades and net purchase of 9 million shares, worth nearly VND300 billion ($17.6 million).
\"Foreign investors swinging from being net sellers to net buyers, alongside strong gains on global markets, excited the locals,\" said FPT Securities analyst Tran Duy Ngoc. \"Transactions were brisk and market liquidity increased strongly, as a result.\"
Ngoc said the market was likely to see some adjustments and profit-taking early this week, as many stocks have risen by 30-50 percent in recent days. The VN-index was expected to range between 268 and 288 points during the coming week.
Nguyen Hong Quang, deputy director of the Tan Viet Securities analysis department, said whether money flows continued to pour into the domestic exchange would depend on world market developments, as little domestic news was seen likely to have significant impacts on the market.
VNDirect Securities Co said the market was still witnessing uncertainty, but some economic indicators - including interest and exchange rates - were supporting market growth. Within the current context, a profitability of 15 percent per year was \"a realisable goal\" for long-term investors, it said.
Pham Ngoc Bich, general director of Prudential Viet Nam Investment Fund Management Co, said foreign investment funds considered now a suitable time to select good shares for their investment portfolios.
\"Domestic share prices may not be very cheap compared with prices on some other markets in the region, but what attracts foreign funds is the small sizes of local firms - which means high growth rates,\" Bich said.
In Ha Noi last week, the HASTC-Index rose a more modest 3.14 percent overall to close the week at 98.57 points. Trading volumes fell slightly compared to the previous week, while daily trading value was higher, at VND270.2 billion ($15.9 million).
The index was expected to range between 90 and 102 points this week, said Ngoc.
Source: Vietnam News