Bargain hunting boosts local stocks

Hanoi (VNS/VNA) - Shares rebounded on April 18 as bargain hunting increased on investor expectation that the market will get back on the track soon.

The VN-Index recouped 0.58 percent to close the afternoon trade at 714.93 points on the HCM Stock Exchange.

The key market index has lost more than 2.8 percent in the last four sessions. Its growth has also slowed from nearly 10 percent in mid last week to roughly seven percent on April 17.

On the Hanoi Stock Exchange, the HNX-Index edged up 0.94 percent to end at 89.12 points. The northern market index decreased 1.9 percent in the two previous sessions.

“The strong recovery of the VN-Index in the last trading minutes surprised the market today,” said Tran Hai Yen, a stock analyst at Bao Viet Securities Company, in April 8’s market report.

Demand rose in the second half of afternoon trading, lifting many large-cap stocks including Vinamilk (VNM), insurer Bao Viet Holdings (BVH), Vietinbank (CTG), Vietcombank (VCB), private equity firm Masan Group (MSN), IT giant FPT Group (FPT) and PV Gas (GAS).

“Today’s strong growth is a good signal for tomorrow’s trading. We expect another rally but not significant given short-term risks from global turbulence,” analysts at Vietnam Investment Securities Company wrote in a report.

Money flow is strong and awaiting a suitable time to return to the market with other investment channels less attractive, the report said, indicating a rise in liquidity on April 18.

A total of 258.3 million shares worth a combined 5.2 trillion VND (228 million USD) were traded in the two markets, up nine percent in volume and six percent in value compared to April 17’s figures.

“However, it is too early to assume a sustainable bullish trend when objective information concerning geopolitical issues, especially the Democratic People’s Republic of Korea issue, still contain numerous potential risks,” Yen said.

She advised investors to avoid aggressive buying and reducing stock exposure of overall portfolios.

Fertiliser companies filed an application to the Ministry of Industry and Trade (MoIT) for a safeguard tariff on a number of imported fertiliser products but this information did little for fertiliser firms.

PetroVietnam Fertiliser & Chemicals (DPM) and PetroVietnam Ca Mau Fertiliser (DCM) rallied but Binh Dien Fertiliser (BFC) and Lam Thao Fertilisers and Chemicals (LAS) declined.

There has been no final decision from the MoIT. However, if this request is approved, the performance of local fertiliser companies is expected to improve, as steel stocks did last year.-VNA