Blue chips and financial shares lead nationwide stock surge

Traders monitor stock prices at Saigon Securities Inc. Domestic stocks enjoyed an impressive increase last week, thanks to trading on blue chips and securities shares. — VNS Photo Viet Thanh

On the HCM City Stock Exchange, the VN-Index gained 2.7 per cent, compared to the previous Friday's close to 518.94 points. The average trading value was VND1.27 trillion (US$59.9 billion) per session on an average volume of 82.4 million shares, climbing some 25 per cent, compared to the preceding week's level.

Also, the HNX-Index on the Ha Noi Stock Exchange rallied 4.1 per cent to 70.76 points. Trading value and volume averaged VND466.7 billion ($22 million) and 54.6 million shares, jumping nearly 45 per cent over the previous week.

Last week, foreign investors favoured large-cap stocks and securities shares, with five of the most purchased stocks listed in Ha Noi coming from securities firms. The total net buying value on both bourses reached VND326 billion ($15.37 million). Since the beginning of 2014, their value exceeded VND386 billion ($18.2 million).

The market also received a boost from the Government's decree to increase foreign stakes in credit institutions from 15 to 20 per cent. Banking shares rose sharply following the news.

However, as liquidity had not shown dramatic changes, it was preferred to invest in shares with good basics, rather than those that were speculative, said Maritime Bank Securities Co's chief economist Le Duc Khanh.

Also, Vietcombank's analyst Tran Huu Phuc suggested investing a 70-80 percentage of portfolios into blue chips, especially Saigon Securities Inc (SSI), Refrigeration Electric Engineering (REE) and software producer FPT (FPT), which were those reaching their limits for foreign ownership, though expected to be lifted in the near future.

The market advanced almost the entire week, before stumbling on Friday. Unlike other analysts, Nguyen Huu Viet from International Royal Securities said, "If the slowdown continues in the next one or two trading days, I'll be more cautious, reducing the proportion of good basics stocks to 20-30 per cent and selling off speculative stocks."

Meanwhile, FPT Securities Co's analyst Le Thi Bich Hang was positive about the medium-term increase. "Short-term investors can choose among businesses reporting good performances during the last fiscal year," she added.

Of note, several companies have reported profits beyond their expectations, such as REE, gas trading company CNG Vietnam (CNG), property developer F.I.T (FIT) and steelmaker Hoa Sen (HSG).