Stocks decline last week on cautious trades
Stocks decline last week on cautious trades
Although shares gained value in the two final sessions of last week, the VN-Index still fell 1.64 per cent over the whole week, concluding Friday's session at 415.55 points, while the HNX-Index dropped 1.97 per cent to close at 69.67 points.
Market volumes and values continued to decline on both stock exchanges.
On the HCM City Stock Exchange, trading volume decreased 18.2 per cent over the previous week's level, averaging nearly 37 million shares worth VND549.5 billion (US$26.2 million) per session. Meanwhile, the daily volume of trades on the Ha Noi Stock Exchange fell 7.4 per cent to over 32.3 million shares, worth nearly VND284 billion ($13.5 million).
Foreign investors were still net buyers on both exchanges last week but they also decreased their buys over the previous week, picking up combined shares of just VND48 billion ($2.3 million).
News on power price rises had an adverse impact on the market last week due to concerns that the price hike will put a brake on the growth of businesses, which have already been suffering from high borrowing costs, high inflation and weakening consumer demand. Even an announcement of another fuel price cut by mid-week failed to lift the mod of investors.
"In the context that the economic situation is not positive and the Government's fiscal and monetary policies have not yet proved their effectiveness, investors will continue to remain cautious," said FPT Securities Co's Nguyen Van Quy in his analysis of market developments.
Prime Minister Nguyen Tan Dung recently said Viet Nam's gross domestic product (GDP) growth this year was likely to be at 5.2-5.7 per cent, lower than the Government's target of 6-6.5 per cent. This raised concerns that credit growth in the latter half of this year will not increase as expected, said the Prime Minister.
Credit expanded by 0.17 per cent by June 12, an improvement of the negative growth of 0.28 per cent by the end of May. According to the National Financial Supervisory Committee, credit growth this year will likely rise by just 8 per cent.
In the meantime, efforts in handling bad debts, particularly with the establishment of the State asset trading company, have not made any progress.
"Thus, it's unlikely to expect big changes in the economic situation during the remainder of this year," Quy said.
Though both stock indices bounced back during the two most recent sessions, most securities companies remained cautious about the market's outlook this week.
"We do not really feel confident of this recovery as the trading volume was still low," said stock analysts from the Viet Nam Investment Securities Co in their market report.
Meanwhile, analysts from HCM Securities Co also said the short-term outlook remained one of declines and encouraged investors to trade at lower prices at around 395 points.
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