November’s uptrend in Vietnam’s stock market could extend on the back of strong capital inflows from both domestic and foreign investors, analysts say.(Photo: tinnhanhchungkhoan.vn
Hanoi (VNA) - November’s uptrend in Vietnam’s stock market could extend on theback of strong capital inflows from both domestic and foreign investors,analysts said.
The VN-Index of the Ho Chi Minh Stock Exchange rose 2.65 percentlast week, concluding December 1 at 960.33 points, the highest since December7, 2007.
Vietnam’s key market index gained nearly 13.5 percent in the pastone month and has climbed 44.5 percent since the beginning of this year.
In north, the HNX-Index rose 4.2 percent last week, closingDecember 1 at 115.49 points. The northern market index has also expanded over44 percent this year.
The Ministry of Industry and Trade (MoIT)’s announcement on thelong-awaited competitive share offering of Sai Gon Beer-Alcohol-BeverageCorporation, better known as Sabeco (SAB), and the Development InvestmentConstruction Joint Stock Company (DIG) has spurred investors’ interest in thestock market.
SAB was also among the biggest gainers with a weekly gain of 3.5 percentgiven that it is the most expensive stock in the market, at 330,000 VND (14.47USD) per share.
MoIT has said that 343.6 million, equivalent to 53.59 percent ofSabeco’s charter capital, will be offered at an initial selling price of 320,000VND a piece on December 18, as the State looks to reduce its holding fromnearly 90 percent to 36 percent.
Meanwhile, DIG’s shares increased over 17 percent last week,trading over 20,000 VND a share, when the Ministry of Construction successfullyoffloaded its entire holding of nearly 50 percent in the constructioncorporation.
The investor excitement has spread to other large caps and liftedtheir prices, including Vinamilk (VNM), up 5.9 percent; Masan Group (MSN), up6.5 percent; and Hanoi Beer Alcohol and Beverage JSC (BHN), up 7.9 percent.
Banks were also on the winning side with most stocks gainingvalue. Sai Gon-Hanoi Bank (SHB) and Asia Commercial Bank (ACB) on the HanoiStock Exchange posted weekly rises of 13.3 percent and 3.2 percent,respectively.
The value of Military Bank (MBB), Sacombank (STB), VPBank (VPB),Vietinbank (CTG), Vietcombank (VCB) and BIDV (BID) shares on the HCM StockExchange increased by between 1-4.8 percent.
Shares of the two biggest oil and gas companies, PV Gas (GAS) andPetrolimex (PLX), rallied 2 percent and 8.3 percent, respectively, thanks topositive developments in the global oil market.
“Cash inflows alternately running into different blue chips ofdifferent groups have backed up VN-Index, minimising the chance of tumbles,”said Tran Hai Yen, a stock analyst with Bao Viet Securities JSC.
In a note last week, Yen said money may keep pouring into largecaps early this week and this will have positive influence on mid-cap and pennystocks, though this effect may be short-lived.
Thien Bui, senior analyst at Viet Dragon Securities JSC, agreedthat strong capital inflows are supporting the market. Many large caps facedcorrections but other shares have moved up and pulled the market.
“It implies that investors are very active in this period.However, there might be a risk, as we do not know whether the current capitalis financed by (a lot of) margin lending or not. If it is, the capital will bevery fragile in the context of a highly volatile VN-Index,” Bui wrote in areport.
Liquidity was high last week with an average of nearly 315 millionshares worth 7.3 trillion VND being traded in the two markets per session.
However, according to Duong Van Chung, head of MB Securities Co’snorthern branch, the market this year has been very bullish, drawing not onlybig foreign capital but a great proportion of available money from residentsinto stocks.
“Thus, the market is longer dependent heavily on margin lending,”Chung was quoted as saying on tinnhanhchungkhoan.vn.
Foreign traders were net buyers of stocks worth nearly 11.3trillion VND (495.6 million USD) in November, lifting the 11-month net buyvalue to 25.7 trillion VND, the highest ever recorded, according to Bao VietSecurities.
The record was motivated by divestment in State-owned enterprisesand the outlook for an upgrade of Vietnam’s stock market. Strong buys byforeign investors are expected to continue provide momentum for the VN-Indexrally.-VNA
VNA
