VN stocks rally on policy assurance amid increasing virus infections

Investors wear masks and sit distantly from each other at An Binh Securities Co amid the spread of coronavirus. Viet Nam's benchmark VN-Index rose 2.67 per cent on Wednesday.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange gained 2.67 per cent to end at 680.23 points, extending growth for a second day from a 0.04 per cent increase on Tuesday.

The HNX-Index on the Ha Noi Stock Exchange jumped 3.21 per cent to close at 95.61 points. It had dropped a total of 7.44 per cent in the previous four trading days.

More than 303.5 million shares were traded on the two exchanges, worth VND4.16 trillion (US$176 million).

The figure included 236 million shares sold via order-matching deals, worth VND2.38 trillion.

The local stock market rebounded in the morning session after Government officials and agencies reassured that a 15-day nationwide social-distancing order, starting on Wednesday, was not a lockdown and the securities market would not be interrupted during the fight against COVID-19.

The State Securities Commission on Wednesday also sent a letter to centrally-run cities and provinces, asking local authorities to consider securities trading “an indispensable activity” so the stock market would run uninterrupted.

Large-cap stocks advanced on both exchanges. Large-cap trackers VN30-Index and HNX30-Index rose 2.95 per cent and 3.67 per cent, respectively.

In the VN30 basket, 27 of the 30 largest stocks by market capitalisation and trading liquidity made gains while only two declined.

The four best-performing large-caps were Sacombank (STB), insurer Bao Viet (BVH), SSI Securities (SSI) and FLC Faros Construction (ROS), which surged 6.7-7.0 per cent.

Other large-caps that followed included petrol group Petrolimex (PLX), HDBank (HDB), Vietinbank (CTG), Military Bank (MBB), Vietcombank (VCB), Bank for Investment and Development of Vietnam (BID), and retailer Mobile World Investment (MWG).

Foreign investors remained as net sellers but their selling lightened on Wednesday. Net foreign selling reached VND140 billion on the two exchanges, down 65 per cent from Tuesday's figure.

Local stock exchanges and securities firms will take a day off on Thursday the national holiday for the Hung Kings Festival.

Wednesday’s gain may only be a technical recovery as trading liquidity of order-matching deals declined on a daily basis, Sai Gon-Ha Noi Securities Co (SHS) said in its daily report.

The VN-Index may encounter strong resistance as it is approaching the 700-point level in the coming days, the company said.

“Investors are betting the market will soon decline sharply again,” SHS said.

“The developments of the coronavirus pandemic will still weigh on market sentiment after the market returns from the national holiday,” the company said.