VN-Index Adds 2.2 per cent

The country’s biggest bourse, the Ho Chi Minh Stock Exchange (HoSE), on October 6 soared 9.76 points or 2.16 per cent after rallying 1.15 per cent or 5.13 points on the previous trading day, closing at 460.72 points, the highest in a month. Hanoi Stock Exchange’s (HNX) HNX Index added higher at 2.31 per cent or 2.82 points, finishing at 124.84 points.

Trading volumes today were meanwhile higher, with 38.3 million shares worth VND1.1 trillion ($53.9 million) changing hands on the HoSE and 29 million shares valued at VND639 billion ($33 million) on the HNX.

Market analysts said despite record high gold prices challenging equities, strong credit growth in September would channel speculative money into stocks, fueling prices higher.

A State Bank source said credit growth in September this year was 2.48 per cent, a relative high compared to just between 0.5 to 1 per cent a month early this year, bringing the total nine months’ number to nearly 20 per cent.

“The 5 per cent growth for the last three months, or over 1.5 per cent point a month, is achievable, thanks to strong demands by the year’s end,” Ho Huu Hanh, State Bank Ho Chi Minh City branch director, said.

Domestic gold prices today jumped to recorded level of VND33 million a tael of SJC in intraday on October 6 after global prices soared to over $1,343 an oz on October 5. Higher gold prices will challenge equities, according to analysts.

Fiarch MacCana, Ho Chi Minh City Securities Corporation’s (HSC) head of research, said the market was likely to lower in the short-term. “We keep our investment stance that medium to long-term players can continue to buy in gradually,” said Cana.

Tran Thi Hai Yen, senior analyst with Bao Viet Securities (BVS), said that after recent declines, bottom-fishing volume was relatively high. However, BVS saw no signal for the VN-Index’s recovery phase.

“Concerns over inflation, interest and exchanges rate as well as stock supply will remain bad influences to investor sentiment while there is still a lack of support news,” said Yen, adding that investors were waiting on the third quarter’s earnings season.

“We maintain our prudent view and recommend investors keep a moderate stock exposure of below 30 per cent,” said Yen.