The share market is set to remain positive this week, but trading could prove to be bouncy for lack of supporting business information, experts say.
|Share prices displayed at Ha Noi stock exchange. – VNS Photo Truong Vi|
Both local stock indices, the benchmark VN Index and the HNX Index, made weekly gains on Friday as investors paid attention to the US Federal Reserve’s meeting and investment portfolio reviews of the exchange-traded funds (ETFs).
The benchmark VN Index on the HCM Stock Exchange inched up 0.09 per cent to close at 761.24 points. It closed up 1.5 per cent in total from the previous week.
The HNX Index on the Ha Noi Stock Exchange advanced 0.55 per cent to end at 98.31 points. The northern market index increased total 1 per cent after one week.
Experts attributed the gains to a good showing by banks and brokerage firms.
Bank stocks that did well last week included BIDV (BID), Vietinbank (CTG), Sai Gon-Ha Noi Bank (SHB) and Vietcombank (VCB), which posted weekly gains of between 2.8 per cent and 5.2 per cent.
Analysts said the gains recorded by bank stocks reflected investors’ expectation in the Government’s efforts to restructure local commercial banks in order to strengthen the banking system.
Bank shares were also supported by the market expectations that a new policy on resolving bad debt would be approved by the National Assembly and banks would have better earnings this year.
Shares of securities companies also rose strongly, including that of Sai Gon-Ha Noi Securities (SHS), Agribank Securities (AGR), Sai Gon Securities (SSI) and VNDirect Securities (VND).
A major reason for the strong growth of brokerage shares is the increase in market trading liquidity, which would help securities companies raise their earnings in proprietary trading and consultancy services.
Tran Hai Nam, an individual investor, told local media that brokerage companies may have high earnings in the second quarter based on the rise in trading liquidity.
In the second quarter, trading volume on the HCM Stock Exchange reached 10.7 billion shares in total and trading value reached VND234 trillion (US$10.4 billion) – a respective quarterly increase of 12.8 per cent and 19.3 per cent.
The Ha Noi Stock Exchange also saw increases in its second-quarter total trading volume and value.
Investor confidence improved despite the US central bank on early Thursday deciding to raise its lending rates by 0.25 percentage points to between 1 per cent and 1.25 per cent. That was the second rate hike in 2017 and the next one is expected in September.
Analysts said the latest hike did not have a negative effect on foreign investor confidence in Viet Nam’s securities market because this had already been factored.
The rate increase of 0.25 percentage points was not a big enough to make foreign investors re-consider their investments in Viet Nam, especially those with long-term interests in the country who still see the country as a highly potential market.
In the long-term, the rate hike will weaken the Vietnamese dong against the US dollar.
Despite the positive signals, there is still a chance that the stock market would have bumpy week as the market waits for second-quarter earnings reports of listed companies.
According to Bao Viet Securities, the market would go up in the short term but trading conditions would not be stable as investors increased their selling of stocks that lack supporting business information, especially large-cap stocks.