ETF trading boosts shares
ETF trading boosts shares
Active trading of exchange-traded funds (ETF) helped lift shares on the two national stock exchanges last week, with both stock indices rising.
The VN-Index on the HCM City Stock Exchange gained 2.27 per cent over the week, finishing Friday's session at 481.35 points. The VN30 tracking the top 30 shares by market capitalisation and liquidity on the bourse was also up, 2.47 per cent, to stand at 553.33 points.
On the Ha Noi Stock Exchange, the HNX-Index edged 1.74 per cent up on a close of 62.06 points on Friday.
Investor psychology improved last week, thanks to positive effects from the ETFs' trading and bottom-fishing activities which drove up trading at both exchanges.
The trading volume in HCM City jumped 22.5 per cent over the previous week, averaging more than 57.6 million shares, worth almost VND949.3 billion (US$45.2 million) per session.
Investors were more cautious on the Ha Noi bourse, however, as just 52.66 million shares, worth an average of VND430 billion ($20.5 million), were exchanged daily, up just 2.7 per cent over the previous week.
Transactions were busy last week following the portfolio restructuring activities of the FTSE Vietnam Index. Both the Market Vector Vietnam and FTSE Vietnam indexes took shares of Vietinbank (CTG) out of their indices after the bank limited foreign holdings at just 12.8 per cent to save room for its strategic investor, Bank of Tokyo Mitsubishi UFJ.
While Market Vector Vietnam continuously sold CTG since December, FTSE Vietnam started to unload CTG from February and constantly sold CTG for 17 sessions in a row with a total net sell of nearly 30 million shares, worth VND578 billion ($27.5 million), of which 16.7 million shares were sold on Friday alone.
Overall, foreign investors were still net buyer on the HCM City exchange, responsible for a net buy of VND261 billion ($12.4 million). They focused buying on shares of logistic Gemadept (GMD), which replaced CTG in the FTSE Vietnam Index, steelmaker Hoa Phat Group (HPG) and Masan Group (MSN), while mainly unloading CTG, insurer Bao Viet Holdings (BVH).
However, they concluded the week as net sellers on the Ha Noi bourse with a total net sell of VND78 billion ($3.7 million).
EFTs' portfolios concentrate on large-cap shares, thus their trading has a big impact on the movements of the stock indices. But, according to many analysts, their influence will be weakened from this week as both ETFs basically completed restructuring their portfolios on Friday.
"Dependence of domestic trades on foreign capital flows is expected to decrease from this week and stocks will have different movements based on other criteria: those stocks that benefit from the new policy or those with solid first-quarter earning result," Tran Hai Yen, analyst at Bao Viet Securities Co, said.
Property shares last week benefited from the newly-issued supportive policy of the State Bank of Viet Nam which will give preferential loans to buy homes for low-income earners. In addition, expectations of the Vietnam Asset Management Company, which will be operational this month, was another key driver for boosted market sentiment.
"Though the market may benefit from positive policies, this expectation has been priced in, thus investors' sentiment will not be as bullish as in the first month of the year," Yen cautioned.
She said division and better business results among enterprises would be a major factor to retain cash flows on the HCM City market.
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