As the Tet holiday nears, individual investors have withdrawn their cash out, limiting transactions and temporarily standing outside the market.(Photo: tinnhanhchungkhoan.vn)
Hanoi (VNS/VNA) - Vietnam’s stock market is set for unpredictable short-termmovement, as both local indexes witnessed a choppy trading week last week, onlow liquidity and weak cash flow.
The benchmark index on the Ho Chi Minh StockExchange (HOSE) increased slightly by 0.05 percent to close at 902.30 points onJanuary 18. The southern index totalled a weekly decline of 0.05 percent.
The HNX Index on the Hanoi Stock Exchangedropped 0.36 percent to close at 101.56 points on January 18, totalling weeklylosses of 0.3 percent.
An average of 282 million shares was traded ineach session last week, worth 3.5 trillion VND (150 million USD).
Last week’s average trading figures were up 70 percentin volume and 6 percent in value compared to the previous week.
Tran Duc Anh, Director of Macroeconomics andMarket Strategy, KB Securities Vietnam (KBSV), said in recent years, the markethas witnessed similar conditions ahead of the Lunar New Year, with marketindexes fluctuating and liquidity plummeting.
This can be considered a seasonal development asinvestors need time to evaluate the previous year’s business and make plans forthe new trading year, Anh told tinnhanhchungkhoan.vn.
The market being influenced by the externalfactors in recent times has also made many investors nervous and kept themoutside the market observing the indices carefully. This has kept liquidity lowas few transactions were made.
Cash in the market has focused on a few stockgroups with stable, consistent and less risky performances.
"The market experienced a quite boringtrading week with the total trading value on the three exchanges only at about 3trillion VND per day, half as much as the average level,” said Nguyen HongKhanh, head of Analysis Department, Vietnam International Securities Company(VIS).
“As the Tet (Vietnamese LunarNew Year) holiday approaches, many individual investors have withdrawn theircash, limiting transactions and temporarily standing outside the market andwaiting until the holiday season ends,” Khanh said.
However, in terms of figures, it is clear thatthe market recorded a significant recovery with VN-Index staying above 900points.
In the two weeks before Tet, manyenterprises will announce fourth quarter business results, including thebanking and textile industries. This will give investors optimism.
The slight net selling of foreign investors onthe HOSE in the last session of the week was not a worrying signal and itdidn’t mean the net buying trend since the beginning of the year has ended,said Anh.
The net buying trend of foreign investors fromthe beginning of this year seems to be similar to the net buying trend inneighbouring emerging markets, Anh said.
During the period, foreign investors net boughtmore than 40 million USD in the Vietnamese stock market. The correspondingfigures for Indonesia, Philippines, Malaysia and Taiwan were 455 million USD, 132million USD, 11.5 million USD and 299 million USD, respectively.
According to Anh, there are many reasons forthis. The US dollar has weakened in recent weeks, global risk factors arecooling and the emerging economies in the region have maintained growthmomentum.
Statistics from the past show that whenever thedollar weakens, global capital inflows often shift to emerging markets, supportingthese markets and helping them perform better than the markets of developednations.-VNS/VNA
VNA
