Oil likely to support shares

Closing Friday's session, the benchmark VN-Index on the HCM Stock Exchange gained a cumulative 4.6 per cent at over 588 points. The southern market saw four rising sessions in five days. - VNS Photo Gia Vi

Closing Friday's session, the benchmark VN-Index on the HCM Stock Exchange gained a cumulative 4.6 per cent at over 588 points. The southern market saw four rising sessions in five days.

On the smaller stock exchange in Ha Noi, the HNX-Index also rallied 3.2 per cent to end on Friday at 80.8 points with four increasing sessions.

"However, the VN-Index is approaching near-resistance at 590-595 points, so the market is likely to correct itself slightly in the next few sessions," analysts at BIDV Securities Co said in their Vietnam Daily Monitor report.

The successful conclusion of the Trans Pacific Partnership (TPP) on Monday lifted export shares, such as garment and textiles, seafood producers and logistics.

Of note, Thanh Cong Textile Garment Investment Trading (TCM), Vinh Hoan Corp (VHC), Mirae (KMR), Hung Vuong Corp (HVG) and Gemadept (GMD) rose strongly in the first two sessions of last week's trades.

Further, shares in the oil and gas, insurance and real estate sectors led the market's uptrend at mid-week.

According to Bao Viet Securities Co's research, insurance, logistics and oil and gas industries saw the highest growth last week, with an average rise of 14.3 per cent, 9.3 per cent and 8.2 per cent, respectively.

Global oil had a positive weekly performance. West Texas Intermediate (WTI) oil rebounded from the bottom in mid-August at US$32.2 per barrel to rise to above $50 per barrel, while Brent crude oil also surged to almost $54 per barrel.

Meanwhile, large-cap oil shares, such as PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD), PetroVietnam Technical Services (PVS) and PetroVietnam Drilling Mud (PVC) were the largest gainers.

"The reason for this price surge came from fears of Russia's military intervention in Syria that could cause risks to oil exploitation activities. In addition, the positive performance of Chinese stocks, as well as optimistic forecasts of oil price hikes, supported the uptrend in the short-term period," Tran Duc Anh, an analyst at Bao Viet Securities Co, wrote in a note.

Research PIRA Energy Group predicted crude prices would rise to $70 per barrel by the end of 2016.

Meanwhile, growth of insurance and realty stocks stemmed from investors' expectations of expanding rooms for foreign holdings and stronger sales of real estate products on higher foreign investment to capitalise on TPP's opportunities, they said.

According to BIDV Securities Co's analysts, foreign investors are backing Vietnamese securities and this could help further improve confidence by domestic investors.

"In the context of a lack of good information, the leading role of foreigners become more important," analysts said, adding that if foreign investors returned to becoming net buyers, this would be a good signal of a longer upward trend.

The foreign sector had four consecutive net buying sessions last week after a two-month net selling streak, picking up shares worth VND1.1 trillion ($48.9 million) in HCM City's market last week, of which their purchases in Military Bank (MBB) reached VND644 billion ($28.6 million).

In the Ha Noi market, they also purchased shares worth a combined VND25 billion ($1.1 million).