Jan 21, 2013

Vietnam - Shares predicted to continue correction

Follow Me on Pinterest
VietNamNet Bridge – The 13-day rally of the VN-Index finished with two declining sessions last week. On the HCM City Stock Exchange, the VN-Index slid 1.8 per cent over the previous Friday's close to 454.16 points, while the HNX-Index on the Ha Noi Stock Exchange gained 2.5 per cent to reach 62.05 points.

Trading value in HCM City averaged VND1.12 trillion (US$53.3 million) per session, dropping 27.1 per cent from the previous week. Average volume reached 85.6 million shares.

In Ha Noi, the corresponding figures fetched VND687.87 billion ($32.7 million) and 92.3 million shares, rising slightly in value while falling in volume.

Penny stocks were more favoured than blue chips, according to the financial information website vietstock.vn. The group of large-cap shares lost an overall 3 per cent, while small-cap and mid-cap shares rose 1.82 and 1.34 per cent respectively.

The market had some "hot" increases earlier in the week, led by the return of strong speculative cash. This was the main thrust that helped the market overcome increased profit taking in large-cap stocks as well as cautious investors before the higher trading amplitude.

Shares in mining, securities and real estate companies attracted the most cash flow. Real estate stocks had a particularly good run, possibly fueled by a lull in recent weeks and the imminent announcement of policies to help the struggling sector.

However, the stock market quickly fell in the last trading sessions of the week, as corrections took hold of blue chips and speculative stocks. With the new increased daily cap of 7-10 per cent (instead of 5-7 per cent) in HCM City and Ha Noi, some shares might have grown 20-30 per cent.

On Friday, investor caution made liquidity decline remarkably compared to earlier in the week. The positive note was that the downtrend was narrowed due to more active trading on leading stocks such as insurer Bao Viet (BVH), Sacombank (STB) and Vietcombank (VCB) on the southern exchange and PetroVietnam Construction Co (PVX) and Sai Gon-Ha Noi Bank (SHB) on the northern exchange. Foreign investors concluded the week as net buyers on both bourses, picking up a combined margin of over VND390 billion ($18.5 million).

Trading this week will be likely affected by some business operation information.

In the fourth quarter of last year, at least 15 businesses reported losses, including several securities firms, and four directors and chairmen of brokerages were arrested for fraud.

The aggregate profit of banks last year almost halved compared to 2011, reaching VND28.6 trillion ($1.3 billion), and most lenders failed to meet their annual targets.

Bao Viet Securities Co analysts predicted the market would continue to decline with some dramatic slumps.

"Factors such as the differentiation between shares based on business operation result or economic policies, in fact, were reflected during the recent period," they said. Other impacts might not be strong enough to help the market back to growth in the short term.

Beginning today, changes to the VN30 have been applied, with rubber company Casumina (CSM) and PetroVietnam Low Pressure Gas Distribution (PGD) replacing real estate shares Tan Tao (ITA) and Tu Liem (NTL).

Source: VNS


Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.

No comments:

Post a Comment