Record liquidity lifts City stock exchange

Investors trace market fluctuations at ACB Securities in Ha Noi. Shares closed higher last week on both national bourses. — VNS Photo Truong Vi

In HCM City, the VN-Index gained 0.9 per cent to reach 505.64 points, while the HNX-Index on the Ha Noi Stock Exchange climbed 1.03 per cent to 64.59 points.

Total trading volume on the southern bourse averaged 119.98 million shares with an average trading value of VND1.595 trillion (US$75.95 million), higher than the previous week's figures.

Matching volume on the HCM City Exchange was 37.4 per cent up over the previous week. On Thursday, matching volume reached a record high of 170 million shares, although the benchmark indice still slipped due to inactive blue chips.

On the Ha Noi Exchange, an average 55.42 million shares changed hands with a total value of VND422.54 billion ($20.12 million).

The market witnessed strong cash flows into speculative stocks last week, which helped boost liquidity on both national stock exchanges.

Real estate sector, construction, mining and transportation stocks proved attractive last week, with Tan Tao Industrial Investment (ITA), Hoang Quan Real Estate (HQC), Vitaco (VTO), Tu Liem Urban Development (NTL), Viet Nam Construction Import and Export Corporation (VCG), Tay Bac Minerals (KTB) and FLC Group (FLC) the main beneficiaries.

Both benchmark indices saw mixed fortunes during the week, rising on Monday, Wednesday and Friday, but losing on Tuesday and Thursday. This was mainly due to foreign investors' net selling during the first trading days of the week, according to stock analysts.

The selling trend worried investors, prompting profit-taking on speculative stocks.

By Friday, speculative stocks had started to lose their attractiveness, while blue chips became more active, helping the benchmark indices close higher.

According to Bao Viet Securities, cash flowed towards blue chips with good business results or a high possibility of increasing interest from foreign investors, including REE Corporation (REE), FPT Group (FPT) and HCM City Securites (HCM).

Foreign investors concluded last week as net buyers, in the green by VND77.6 billion ($3.69 million). The net buying trend returned for the final two trading days of the week, consolidating investor confidence and protecting the market against increased profit taking pressure on speculative stocks.

The high market activity was prompted by the rumour that the Government signed a document to increase accessibility for foreign investors. However, as of Friday, there was no official information to support this.