Workers operate machinery at PV Gas Ca Mau Co. Oil and gas companies, and banks led the market uptrend on August 26. Photo: VNA/VNS Shares rose on August 26 on the two Vietnamese exchanges, prompted by an improvement in investor confidence, although shares across Asia were mixed after a fresh rate cut by the People's Bank of China.
China on August 25 decided to cut interest rates and lowered the amount of reserves that banks must hold. Regional stocks responded in different ways following this move.
Shares in Japan, Australia, the Republic of Korea and Thailand went up but Chinese and other countries' markets sank as investors feared that these measures would not be strong enough to halt the collapse in China, as well as stabilise its slowing economy.
In Vietnam domestic investors increased buying in both markets, extending the rally to two consecutive days.
The benchmark VN-Index on the HCM Stock Exchange gained almost 16 points, or 3 percent, to close the day at 545.89 points. The Index also rose 0.58 percent on August 25.
On the Hanoi Stock Exchange, the HNX-Index improved 3.3 percent to end the day at 76.46 points.
The two indexes declined steeply during the last two weeks after China devalued its currency. Before the rebound, the VN-Index had lost over 90 points, or about 14 percent since August 11 and almost hit the yearly low of about 510-520 points. The HNX-Index also lost 11 points, or 13 percent, since August 11.
According to Nguyen Thi Huu, Director at MB Securities Co's Bac Saigon branch, the August 24 trading signaled that the market had reached the bottom and would bounce back.
The VN-Index on August 24 at one point fell below the yearly bottom of about 510 points before rebounding, driven by increased bargain hunting.
"From what's been happening in the market since the beginning of the week, I reckon the VN-Index could bounce back to 560-570 points. However, the domestic market is being affected by what is happening in the global markets, investors would be wise to watch global financial movements closely," Huu said.
The overall market condition was positive on August 26 with nearly 60 percent of the total 674 stocks gaining value on the two exchanges, of which 26 hit the daily rise limit set by the government. Only 89 stocks ended lower and 198 closed unchanged.
Oil and gas companies and banks led the market uptrend. PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD), Petroleum Equipment Assembly & Metal Structure (PXS) and PetroVietnam Drilling Mud (PVC) all hit the ceiling of 7-10 percent.
Six of total nine listed banks climbed, of which BIDV (BID) rose by the maximum of 7 percent. Others increased between 2-4.5 percent. Two banks closed unchanged and only Eximbank (EIB) ended lower.
Liquidity declined from August 25 with a total of 173 million shares worth more than 2.54 trillion VND (113.1 million USD) being traded in the two markets, down 25 percent in volume and 23 percent in value compared with the levels on August 25.
However, foreign investors again went contrary to domestic investors. They continued their net selling on August 26 with another value of over 203 billion VND (9 million USD). Net foreign selling on August 25 reached 54.6 billion VND (2.4 million USD).-VNA
