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City breaks 500 barrier but liquidity lowShares made significant gains on the HCM City Stock Exchange last week to break the 500 point barrier, but stocks tumbled in Ha Noi as liquidity remained low.

The VN-Index on the HCM City Stock Exchange gained 1.4 per cent to reach 500.62 points, an important landmark which should buoy traders’ confidence.

Trading value averaged VND656.8 billion (US$30.9 million) per session, which was relatively low considering trading time had been extended by nearly an hour.

Large-cap stocks led last week’s rally, while small-cap shares generally struggled.

Increased selling pressure from the previous week dragged the market down on Monday, but trading was more balanced in the following sessions when demand increased as shares reached attractive prices. Blue-chips were the main focus of the buys.

The gains of PetroVietnam Gas Corporation (GAS), property developer Vingroup (VIC) and private equity firm Masan (MSN) played an important role in lifting the VN-Index past the 500 point mark.

Meanwhile, smallers stocks – in terms of capitalisation and liquidity – were traded sparingly and offered little in the way of profits.

Last week, the fastest growing stocks in HCM City were FeCon Foundation Engineering And UnderGround Construction (FCN) and Dong Phu Rubber (DPR).

FCM rose 13.37 per cent after Samsung chose the company to build the dormitory base for its Thai Nguyen project.

DPR rallied 10.26 per cent as speculative cash poured into the stock following major shareholders’ buying orders. Its general director Nguyen Thanh Hai registered to buy 75,000 shares, while the chief accountant also put down for 25,000 units.

Foreign investors continued their recent selling trend. The total net selling value last week in HCM City was nearly VND47 billion ($2.2 million), with investors withdrawing from insurer Bao Viet Holdings (BVH), Phu My Fertiliser (DPM), Eximbank (EIB) and Vietinbank (CTG).

On the Ha Noi Stock Exchange, the net value reached VND48 billion ($2.25 million) as PetroVietnam Southern Gas (PGS), Kim Long Securities Co (KLS), PetroVietnam Technical Service (PVS) and Sai Gon – Ha Noi Bank (SHB) stocks were heavily sold.

The benchmark HNX-Index fell 0.3 per cent, to rest at 61.70 points, while the average value of trades was just VND147 billion ($6.9 million).

Maritime Bank Securities Co analyst Trinh Thi Hong predicted the HCM City market would continue to advance this week, with the VN-Index possibly hitting 510 points.

The director of the Viet Nam Asset Managing Company (VAMC) said in the next 12 months the body would issue special bonds for around 10 commercial banks to buy back non-performing loans (NPLs) worth VND10 trillion ($471.6 million). VAMC would give priority to banks with the highest rates of NPLs.

This year, the company will buy banks’ NPLs at the book value and sell at market price.

According to FPT Securities Co analyst Nguyen Van Quy, this will be positive information for investors over the next two months.

“The real estate market is slightly recovering as inventories in the sector begin to decline compared to the previous quarter,” he said, hoping further news like this would improve market sentiment. — VNS

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