Vietnamese shares gain on TPP hopes progress

An investor passes by automatic stock trading boards at Tan Viet Securities in Ha Noi (Photo:VNA)

Vietnamese shares on October 2 inched higher for a second day amid optimism for local car assemblers and car makers following progress made at the Trans-Pacific Partnership (TPP) meeting held in Atlanta.

The benchmark VN Index on the HCM Stock Exchange gained 0.2 percent to close at 563.54 points and the HNX Index on the Hanoi Stock Exchange was up 0.1 percent to finish at 78.02 points.

During a four-day TPP discussion, Canada and Mexico on October 1 showed some willingness to expand the North American market to more auto parts made in Asian countries, including Vietnam, Reuters reported on October 1.

As a result, the auto sector had significant gains. Saigon General Service Corp (SVC) gained 6.7 percent and Giai Phong Motor JSC (GGG) was up 7.8 percent.

Other local producers recorded smaller gains. Hoang Huy Investment Services JSC (HHS) gained 1.8 percent and TMT Motor JSC (TMT) rounded up 2.3 percent.

Auto manufacturers have gained at least five percent in the last two days as they had expected the TPP to be concluded this week and open more opportunities for local carmakers.

The TPP also had positive impacts on local food producers. The best gainers in this sector were Lam Dong Foodstuff JSC (VDL), Mekong Fisheries JSC (AAM) and Chuong Duong Beverages JSC (SCD) which rose 5.8 percent, 7.7 percent and 6.7 percent, respectively.

The two biggest food producers – Vinamilk (VNM) and Ma San Group (MSN) – were up one percent and 0.7 percent.

The stock market was also boosted by energy firms, which slightly gained 0.5 percent as the US-benchmark crude West Texas Intermediate increased by 1.3 percent to trade at 45.67 USD a barrel on October 1.

As a result, Petrovietnam Drilling & Well Services (PVD) gained 0.6 percent, Petroleum Equipment Assembly And Metal Structure JSC (PXS) rose 0.7 percent and Petrovietnam Coating JSC (PVB) improved by 0.3 percent.

However, market gains were limited after Nikkei Vietnam Manufacturing on October 1 reported that the country's Purchasing Managers' Index (PMI) in September dropped to 49.5 points from 51.3 points in August, brokerage Saigon-Hanoi Securities Corp (SHS) reported on October 1. The Hanoi-based brokerage firm said that falling demand from overseas markets for local-made products last month was the main reason for the fall of Vietnam's PMI.

SHS said that strong foreign selling would likely drag the market down in the near future as foreign investors were continuing to withdraw their investments from emerging markets.-VNA