VN-Index sets a new high on strong growth of blue chips

A customer makes transactions at Saigon Securities Inc's trading house. SSI hit the ceiling growth of 7 per cent yesterday.- Photo vietnamfinance.vn

On the Ho Chi Minh Stock Exchange, the VN-Index increased 0.75 per cent to close the week at 1,390.12 points. The southern market’s index finished the week up 1 per cent.

The VN30 which tracks the top 30 largest shares by market value and liquidity successfully overcame the milestone of 1,500 points as two thirds of the stocks in the basket gained value.

Saigon Securities Inc (SSI) was the biggest gainer, hitting the ceiling growth of 7 per cent to close at VND53,700 (US$2.32).

Big gainers included PV Gas (GAS), HDBank (HDB), Khang Dien House Trading and Investment (KDH), Vietcombank (VCB), Novaland Investment (NVL), Phat Dat Real Estate Development (PDR), Vinamilk (VNM) and Techcombank (TCB) with increases of between 1-6 per cent each.

However, though the VN-Index is setting a new high, the trading volume is decreasing in recent sessions and remains below the recent average of 20 sessions.

More than 598 million shares worth VND19 trillion ($823.3 million) were traded on Friday, of which over 518 million shares worth VND16.6 trillion were exchanged through order matching method, the lowest level since February 26 this year.

According to some market insiders, high level of margin (borrowing money from brokerage companies to trade) at securities companies have raised concerns over a strong correction which is reflected in declining money entering the market at this time.

Data on stockbiz.vn showed that the margin balance has continuously increased in recent years. As of May 31, 2021, the margin balance of the whole market has reached more than VND112 trillion ($4.8 billion), an increase of VND31.2 trillion compared to the end of 2020 and up VND10.7 trillion against the end of the first quarter this year.

According to Pham Hong Son, vice chairman of the State Securities Commission, the strong growth of the market is leading to an increase in margin loans. Many securities companies have also been preparing plans to increase charter capital to serve rising loan demand in the future.

On the Ha Noi Stock Exchange, the HNX-Index advanced 1 per cent to close Friday at 318.22 points.

More than 118 million shares worth VND2.9 trillion were traded in the northern market.

According to analysts at Viet Dragon Securities Co (VDSC), many stocks still weakened and there was not any main leading groups which led to a disoriented market and the cash flow still timidly entered the market.

“Under this condition, investors need to observe and wait for a clearer movement of cash flow to participate, or look for opportunities of stocks with positive Q2 business results,” said Bao Nguyen, VDSC’s stock analyst.