Bank earnings to boost shares

The front view of the Ha Noi Stock Exchange. Listed banks could lift the two exchanges this week after reporting better earnings for the first quarter of the year. - VNS photo Doan Tung

The benchmark VN Index recorded its strongest daily growth since March 6, rising 2.30 per cent, or 25.23 points, to end Friday at 1,119.86 points. But its previous dive on Thursday still left the VN Index down 3.2 per cent week on week.

The HNX Index on the Ha Noi Stock Exchange increased by 1.16 per cent to close at 132.58 points. Like the benchmark index, the HNX Index finished lower from the previous week by falling total of 0.5 per cent after five trading days.

An average of 241.2 million shares were traded in each session of the last trading week, worth VND7.78 trillion (US$346 million). The figures were down 18.6 per cent in volume and 10.4 per cent in value compared to the previous week.

The decline of trading liquidity indicated investors were cautious and concerned over “a potential bull-trap subsequently leading to a tumble,” Bao Viet Securities Co (BVSC) said in its weekly report.

“The index significantly rebounded after falling to the 1075-1080 support zone,” BVSC said, adding that the strong last-minute growth of the index opened up the possibility that it would rally in the coming week.

Analysts and securities firms are putting much of their expectations on bank stocks after some of them held annual shareholders’ meeting in the weekend and provided positive earnings for the first quarter of 2018.

Last week was considered a bad period for bank stocks even though some of them made big gains in the last trading session to boost the overall performance of the market.

“Bank stocks are the ones that have supportive news” as “some of them had annual shareholders’ meetings opened on the weekend and announced better first-quarter earnings,” Hoang Thach Lan, head of the individual investor division at Viet Dragon Securities (VDSC), told tinnhanhchungkhoan.vn.

According to BIDV Securities Co (BSC), 161 listed companies on both local exchanges had announced their first-quarter earnings by April 20, earning a total of VND6.27 trillion in post-tax profit, a yearly increase of 35.8 per cent.

Among listed firms that recorded the highest profit growth was Military Commercial Joint Stock Bank (MBBank), which posted an annual increase of VND659 billion or 74 per cent in post-tax profit for the first quarter of the year.

Vietcombank has also announced its first-quarter post-tax profit rose 59 per cent year on year to VND3.5 trillion from VND2.2 trillion in the first quarter of 2017.

Vietinbank reported at its annual shareholders’ meeting on Saturday that its first-quarter pre-tax profit rose one-fifth year on year to VND3 trillion.

At the annual shareholders’ meeting on Saturday, Bank for Investment and Development of Viet Nam (BIDV) announced it would issue more shares to increase its charter capital by 28 per cent to VND43.6 trillion.

The share issuance could be carried out by selling more than 603 million shares to foreign investors or 170.9 million shares via competitive bids.

Besides positive updates from banks’ performances and future business plans, investors may look for opportunities in bank stocks as they have fallen strongly since April 10. The decline may encourage investors’ to bargain hunt for those stocks, Lan added.

Vietinbank (CTG) and MBBank (MBB) have dropped 11 per cent each in this period. BIDV (BID) has declined by 13.3 per cent and Vietcombank (VCB) has lost 14 per cent.