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View Full Version : Foreigners increase purchases of S&P Vietnam items



boiman
30-09-2008, 06:04 PM
FPT, SJS,
PVD and other share items listed in the S&P Vietnam’s 10 Index have
caught the special attention of stock market investors.





Last week, after the
names of S&P Vietnam’s share items were announced, foreign
investors began pushing up purchases of the share items. This has
helped stabilise the stock market and prevented the VN Index from
falling as a result of the gloomy global market.





According to Pham
Thanh Thai Linh, an analyst of Bao Viet Securities Company, who spent
time researching international indexes, including S&P 500 (US), Dow
Jones (US), TSE 300 (Canada), MIB 30 (Italia), in order to have names
listed in the S&P Vietnam, companies must the meet strict
requirements of S&P such as: the room for foreign investors is over
$5mil; the total capitalisation value, not including state-owned value,
is at least $50mil; high liquidity (the average transaction value must
be at least $250,000 per day). Additionally, companies must have a
corporate governance system that meets the requirements of the
organisation.





With such strict
requirements, Linh said, it is understandable why S&P Vietnam’s
share item prices have been increasing sharply since their names were
announced. The prices of share items in S&P 500, Dow Jones, TSE
300, MIB 30, DAX 100 and Nikkei 500 increase by 20-25% after their
names are announced.





Linh went on to say
that the announcement of the S&P Vietnam will help catch more
attention from the press and investors, thus helping increase the
number of potential investors. This will also help improve their
liquidity (the liquidity of companies in the S&P 500 increase by
30%).





The S&P Vietnam announcement has very big significance in Vietnam,
as this is the first time a foreign ranking company has compiled an
index of listed companies in the country. Such an index will help
international investors access Vietnam’s stock market in a selective way.





Analysing the five
transactions in the last week, September 22-26, Linh affirmed that
foreign investors focused on purchasing the share items in the S&P
Vietnam’s list. The 10 S&P Vietnam’s share items alone accounted
for 50-70% of the purchase value of foreign investors.





In markets like the US or Australia, the indexes are restructured monthly, while S&P Vietnam 10 may be restructured quarterly.





However, other
analysts do not share the same view as Linh. They think that investors’
purchases of share items in the S&P Vietnam 10 is just a
coincidence. Head of the Analysis Division under the HCM City
branch of SME Securities Company Hoang Thach Lan said that foreign
investors have been trying to buy DPM and PVD since the beginning of
the year.





“The impressive
business results announced by the companies in the first eight months
of the year, and the good brand names of the companies both have put
the share items among blue-chips, and it is understandable why foreign
investors have been trying to buy them,” Lan said.





However, Lan said
that the S&P 10 deserves to be referred to as it shows the
capitalisation value and the trading volume of share items.





Table 1. The ratio of foreign investors’ purchases on total trading volume (%)













































|
Average level in the last 3 months
|
Average level in the last five days




FPT
|
18.67
|
35.16




PVD
|
18.27
|
39.67




DPM
|
18.34
|
51.21




SJS
|
8.41
|
25.49




PPC
|
20.61
|
41.06




ITA
|
- 19.92
|
5.06




VIC
|
4.8
|
18.56




KBC
|
45.27
|
37.73




PVI
|
3.29
|
20.58




PVS
|
4.2
|
21.3