Shares advance after FTSE announcement

Early on Thursday, FTSE Russell announced it added Viet Nam, which is currently classified as a Frontier market, to the watch list for possible reclassification as Secondary Emerging. - Photo baodauthau.vn

On the Ho Chi Minh Stock Exchange, the VN-Index increased 0.57 per cent to close at 1,015.37 points. The southern market index decreased 0.2 per cent in the last two trades.

On the Ha Noi Stock Exchange, the HNX-Index added 0.44 per cent to end at 116.08 points. It edged up 0.1 per cent on Wednesday.

A total of 266.6 million shares worth a combined VND5.8 trillion (US$249.6 million) were traded on the two exchanges, down 18 per cent in volume and 3.3 per cent in value compared to Wednesday.

Early on Thursday, FTSE Russell announced it added Viet Nam, currently classified as a Frontier market, to the watch list for possible reclassification as Secondary Emerging.

“Being included in the watch list does not mean that Viet Nam will soon be upgraded to an emerging market, but this will acknowledge the country’s efforts in improving the market quality as well as planning policy for future,” MB Securities JSC (MBS) wrote in a report.

Many heavyweight stocks in the VN30 basket (which tracks the top 30 shares by market value and liquidity) gained value on Thursday.

Big gainers included Vinamilk (VNM), Saigon Securities Inc (SSI), Novaland Investment (NVL), Mobile World Group (MWG), Hoa Phat Group (HPG), Techcombank (TCB) and Hau Giang Pharmaceutical (DHG) with growth of 1-3 per cent each.

Oil stocks also recovered on Thursday. While PV Gas (GAS) only inched up 0.1 per cent, other big companies such as PetroVietnam Drilling and Wells Service (PVD), PetroVietnam Technical Services (PVS) and PetroVietnam Drilling Mud (PVC) rose between 3-7 per cent.

On the other end of the spectrum, banking stocks slumped and restrained the market. Big banks including Vietcombank (VCB), Vietinbank (CTG) and BIDV (BID) all slipped.

Foreign investors were net buyers on the Ho Chi Minh Stock Exchange, picking up shares worth VND103 billion ($4.4 million). They have been net buyers for four consecutive sessions for a total value of VND282 billion.

According to MBS, if Viet Nam was upgraded to emerging market status, it estimates passive capital (investment that tracks a market-weighted index or portfolio) flowing into the Vietnamese market may reach between $184 million and $555 million.

Stocks which will likely receive new investments will be large caps such as Vinamilk, Vingroup, Masan Group and Hoa Phat Group, according to MBS.

However, it noted investment flows would depend on the market weight of the country, as well as the attractiveness of the market at the time of entry.