Skepticism remains despite recovery

Investors at Artex Securities Company. — VNS Photo Việt Thanh

HÀ NỘI — Vietnamese shares soared yesterday as strong buying boosted almost all local stocks following the market’s recent decline.

The benchmark VN-Index on the HCM Stock Exchange jumped  三. 四 五 per cent, or  三 五. 四 六 points, to end at  一,0 六 二. 二 六 points. The VN-Index lost total  二. 二 per cent last week.

The HNX Index on the Hà Nội Stock Exchange gained  三. 二 五 per cent to close at  一 二 六. 五 五 points, extending its growth to total  四. 六 per cent after the last three sessions.

More than  二 一0 million shares were traded on the two local exchanges, worth VNĐ 五. 七 六 trillion (US$ 二 五 六 million), dropping to below the average level of the last  二 一 sessions.

The market breadth was positive with  三0 二 gaining stocks and  一 六0 declining stocks while the remaining  一 一 二 others ended flat.

Nineteen of the  二0 sectors on the stock market saw share prices rise, including insurance, banking, securities, energy and food and beverage. Those sector indices moved up between  三. 五 per cent and  五. 六 per cent, data on vietstock.vn showed.

Leading gainers among those stocks were Bank for Investment and Development of Việt Nam (BID), insurer Bảo Việt Holdings (BVH), Vietinbank (CTG), brewer Sabeco (SAB) and Saigon Securities Inc (SSI).

These stocks were also the important element to lift the large-cap VN 三0 Index up  三. 六 七 per cent, to  一,0 四 八.0 三 points. In the large-cap basket VN 三0,  二 八 stocks advanced and only one declined.

According to Nguyễn Thanh Lâm, head of individual client and market analysis at Maybank Kim Eng Securities JSC, the VN-Index had witnessed strong volatility since April as it had lost more than  一 四 per cent in the period from its all-time peak of  一, 二0 四. 三 三 points made on April  九.

The sharp fall of the VN-Index made it the worst-performing benchmark index in both regional and international markets, which was a big change after it was recognised as the best-performing index in the first quarter of  二0 一 八, he said.

“The strong correction of the VN-Index has lessened the market’s price-to-earnings (P/E) ratio to  一 八 from  二 二, which is now level with other regional markets, indicating the correction may get slower and the market may recover soon.”

Opportunities had opened up for investors in some groups of stocks that had seen prices erased significantly in the last one month such as banks, property developers and financial companies, Lâm added.

Despite a strong gain yesterday, Bảo Việt Securities Company (BVSC) remained skeptical about the short-term prospect of the stock market as trading liquidity has remained quite low and signalled no improvement.

“As liquidity has yet to improve, this recovery still seems doubtful,” BVSC said in its daily report. Liquidity has remained below the  二 一-session average, proving investors “remained cautious and skeptical about the market’s uptrend.”

Another factor that must be viewed insightfully at the moment was the flow of foreign capital in the stock market, which has remained as “net selling” since April, Lâm from Maybank Kim Eng Securities JSC said.

Foreign investors on Monday posted a total net sell value of nearly VNĐ 四 七 二 billion on the local exchanges. They sold net VNĐ 六 七 一 billion last Friday.

“We need to wait until foreign investors turned optimistic about the stock market in the short-term with the return of their net-buying status, then the market condition may improve further,” he said. — VNS