Stocks advance but profit-taking likely
Stocks advance but profit-taking likely
The stock market enjoyed a successful trading week, with the benchmark VN-Index hitting a two-year high on Friday, but the pressure of profit-taking is also increasing after a long rally.
On the HCM City Stock Exchange, the VN-Index gained a cumulative 1.85 per cent during the week, closing Friday at 527.97 points. The VN30, tracking the top 30 shares, also jumped 1.08 per cent to stand at 588.21 points.
The market volume fell 21.5 per cent from the previous week but remained high at about 72 million shares, worth VND1.2 trillion (US$57.1 million) per session.
Pressure from profit-taking in blue chips that had increased substantially, like Gemadept (GMD), Masan Group (MSN), Bao Viet Holdings (BVH) and Phu My Fertiliser (DPM), shook the market early in the week. However, strong buys by local investors helped sustain the market, especially for the shares with supportive information.
Investors sought out shares of Vietinbank (CTG) after the bank announced on Tuesday it had increased the foreign holdings limit from 12.79 per cent to 30 per cent. CTG climbed for two days in a row from VND18,500 to VND20,900 ($1) on average trades of around 4.5 million shares per session. CTG was also the second most active share for foreign trading. Foreigners picked up VND26 billion ($1.2 million) in CTG even though the share concluded last week as a net seller in the HCM City market, unloading shares worth a combined VND302.6 billion ($14.4 million).
The shares forecast to go into the portfolio basket of exchange-traded fund FTSE such as Southern Rubber Industry (CSM), PetroVietnam General Services (PET) and Pha Lai Thermal Power (PPC) also rose strongly.
Late Friday afternoon, FTSE Vietnam (managed by ETF Deustche Bank) officially announced it had added CSM, PPC and PET to the investment basket of the FTSE Vietnam Index while taking out PetroVietnam Low Pressure Gas Distribution (PGD) and Tu Liem Urban Development (NTL).
The FTSE Vietnam All-Share Index included three new shares –CSM, Binh Minh Plastic (BMP) and Hau Giang Pharmaceutical (DHG). Three others – PGD, NTL and Phu Nhuan Jewellery (PNJ) – were removed.
According to Nguyen Xuan Binh, analyst of Bao Viet Securities Co, this week's trading would again centre around information on restructuring the portfolios of exchange-traded funds.
"Recently, both foreign and domestic investors have been proactive in forecasting and buying/selling the shares involving ETFs' portfolio restructuring in advance," Binh wrote in a report.
He predicted that the shares newly added to the investment portfolios of FTSE Vietnam would continue rising, while excluded shares would see a slight reduction.
On the Ha Noi Stock Exchange, the HNX-Index also had a positive performance with the HNX-Index reaching 65.58 points, up 1.48 points over the previous week's close.
Market volume declined 35 per cent from the earlier week, however, averaging over 46 million shares, worth VND492 billion ($18.7 million), per day.
According to analysts at FPTS Securities Co, both stock indices are approaching strong resistance levels – 530-540 points for the VN-Index and 67 points for the HNX-Index – and the market would likely experience several correction sessions this week given increasing profit-taking pressure.
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