Blue chips likely to push VN shares up
Blue chips likely to push VN shares up
Vietnamese shares may extend their earlier gains this week as investor confidence in large-cap stocks has been bolstered and crude price gains may bring short-term benefits to listed oil firms.
The benchmark VN Index on the HCM Stock Exchange on Friday rose 1.4 per cent – the strongest growth in the last two weeks – to finish last week at 667.75 points. Also, the southern market index was up 0.8 per cent from the previous week.
The HNX Index on the Ha Noi Stock Exchange rose 0.7 per cent to end at 83.93 points. Further, the northern market index rallied by 1.5 per cent in the last five sessions.
"Friday strong stock gains and blue chips receiving a strong cash flow signal a new upward trend for the market," Maritime Securities Inc (MSI) wrote in a note.
"The VN Index has surpassed the level of 660 points thanks to impressive performances of blue chips," said Le Duc Khanh, MSI's head of strategy division.
"The VN Index may continue to rise this week and approach the testing range of 675 to 680 points this week."
Among the largest stocks, Vietcombank (VCB) helped drive the market up in the last two sessions, after the bank announced it would issue nearly 933 million bonus shares for investors, with a rate of 35 per cent.
Each investor will receive 35 bonus shares for every 100 shares he/she currently holds. The share issuance is considered to be a method to benefit current shareholders and assure that the bank's shares are attractive to investors.
VCB on Friday surged 6.5 per cent to close last week's trading at VND57,500, up 7.5 per cent during the last trading week.
Consumer goods producer Masan Group (MSN) also attracted investors, after the company announced its plan to buy back 20 million shares late Thursday.
The announcement helped MSN cover some of its four-day decline of 8.9 per cent. Further, on Friday MSN advanced 2.4 per cent to end at VND63,000.
The recovery of crude prices during the last two trading days is also expected to boost investor confidence, especially when Iran – one of the leading oil exporters – said it would co-operate with the Organisation of Petroleum Exporting Countries (OPEC) to stablise the global market.
Also on Friday, London-traded Brent crude traded at nearly US$50 per barrel, up 1.8 per cent after two sessions.
Local energy stocks benefited from the rise of global oil prices. PetroVietnam Gas Corp (GAS) and PetroVietnam Technical Services Corp (PVS) on Friday ended their losing streaks to increase 2.4 per cent and 0.5 per cent, respectively.
The market may count on domestic investors, whose "investments are rising" and "foreign net selling may only come from a small group of foreign investors on the market," according to Nguyen Nhat Cuong, deputy head of market investment at Vietinbank Securities Co.
Last week, foreign investors were net sellers, with a sell value of VND523.2 billion ($23.25 million), totaling a net sell value of $90 million since the beginning of August.
That may come from the concerns that the US central bank could increase lending rates as soon as September, weakening local currencies against the US dollar.
In comparison, foreign investors recorded a five-week net sell value of more than $116 million in Viet Nam before the US central bank made its first rate hike in December 2015 after a decade.
Last week, Viet Nam's central bank raised the daily reference mid-point rate by VND39 to VND21,895 per dollar to protect Vietnamese exports on the global markets.
"Investors should pay attention to the status of foreign investors, though the link between US rate hikes and foreign net selling has been unclear," Bao Viet Securities Corp (BVSC) said.
