Nov 20, 2012

Vietnam - No optimistic signal for market: securities firms

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HCMC - Given the slight movement during last week and no optimistic news on macro economy, securities companies don’t expect any strong rallies on the equity market this week. The VN-Index closed last week at 385.71 points, falling 1.2 points on Friday alone but decreasing only one point for the whole week.

The dreary trade on the stock market has persisted for the last three months with similar daily scenario of low liquidity and indexes moving in a narrow range. Last week saw trade averaging out at 29 million shares a day, compared to an average volume of 31.2 million in the week before. On Friday, the southern market saw 102 stocks increasing and 98 falling with 25 hitting the ceiling prices and 41 tumbling to the floor prices.

Technical analysis of Ho Chi Minh City Securities Co. (HSC) shows that the investors are still cautious so the pressure of short-term profit taking will rise when shares that were bought at low prices will arrive investors’ accounts in the next days. The company gives neutral view on the market’s middle term movement.

Viet Capital Securities says that low liquidity is an indicator for a new recovery of the market. However, the market would face strong selling at the level of 390 points on the VN-Index, and if the market can’t break this level, it will start a short-term downtrend again, the broker said.

Meanwhile, technical analysis of Saigon Securities Co. (SSI) indicates that the VN-Index can continue rising if it can break the 388-389 level.

Saigon-Hanoi Securities Co. expects that the HCMC market would see slight increase today but given low liquidity, the company does not expect a strong momentum in the market for an uptrend.

Nguyen Son, head of the Department of Market Development under the State Securities Commission, told the Daily that the commission had taken many measures to help increase the market liquidity like applying market order, lengthening trading time, and reducing payment time to T+3. However, he said the technical measures hardly supported the market this time as it had suffered bad news from the macro economy like bad debts at banks and bad business results of companies.

The HNX-Index of Hanoi Stock Exchange last Friday rose 0.12 point to 51.81. However, compared to the previous day, the traded volume on the exchange declined by 28% to 19.9 million shares worth VND113.6 billion.

Thuy Trieu - The Saigon Times Daily


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