phuocpham
16-11-2009, 07:48 PM
Positive moves on Wall Street and the central bank's effort to cool down an overheated gold market helped ease the downward pressure on domestic stock prices last week.
The VN-Index ended up the week largely flat, closing down just 1.2 per cent over five days to 548.21 points, with three of the five daily sessions seeing overall gains.
Average daily volume on the HCM City Stock Exchange dropped to 46.24 million shares, down significantly from the previous week's average of over 57.6 million. Trades during the past week averaged a total value per day of VND2.1. trillion (US$116.7 million).
While trading was also mixed on the Ha Noi Stock Exchange, the HNX-Index reflected greater weakness on the northern bourse, sliding 2.91 per cent over the course of the week to close on last Friday at 183.64 points.
Daily volumes averaged 10 million shares per day lower than in the previous week, at below 24 million shares, while the average value on the northern bourse reached VND989 billion ($55 million) a day.
The stressful sentiment that had prevailed on the market over the last couple of weeks was relieved by Wall Street recovering its feet, said Dao Viet Anh, an FPT Securities Co analyst.
"The Dow Jones surpassing 10,000 again, along with supportive news about the prospects for economic recovery, were the key to turning around the VN-Index for three consecutive sessions late last week," Anh said.
The State Bank of Viet Nam's decision to once again allow gold imports effectively stalled the heated advance of domestic gold prices and sent many speculators hustling back to the securities market, said Nguyen Hoang Hai, an analyst with a HCM City-based securities firm.
"In the context of advancing global markets, domestic gold prices skyrocketed from VND23 million a tael to nearly VND30 million in just four days," said Hai, noting the lines of buyers that began forming in front of gold shops when the price hit VND26 million.
But Hai doubted whether the end of the brief "gold storm" had really had any rebound effect on the stock market, noting that volumes still dropped over the course of last week.
Global Gold Co general director Lam Minh Chanh also said that a wall existed between these two investment channels. "The capital needed for gold investments is smaller than that for securities investments, which are supported to a high degree by leverage."
Only a few investors who trade in both gold and securities sold out gold to cycle capital back into stocks, he said.
Net buys by foreign investors on both stock exchanges were an additional supportive factor last week for a faltering market, with foreign investors focusing on property stocks, said Hai.
This sector bought a net of 7.9 million shares on both markets, for a combined value of VND354 billion ($19.7 million), favouring Hoang Anh Gia Lai (HAG) in HCM City and Kinh Bac Urban Development (KBC) in Ha Noi.
"The stock market will hardly be happy next week," added Anh, pointing to another decision forth-coming from the central bank restricting commercial banks from lending for the purpose of investing in equities such as securities and foreign currencies, as well as gold. Commercial banks have also raised lending interest rates, further restricting the profit margin for leveraged securities trading.
Anh predicted the VN-Index would range in the coming week between 530 and 560, and he recommended investors keep 40 per cent of their capital in cash.
The VN-Index ended up the week largely flat, closing down just 1.2 per cent over five days to 548.21 points, with three of the five daily sessions seeing overall gains.
Average daily volume on the HCM City Stock Exchange dropped to 46.24 million shares, down significantly from the previous week's average of over 57.6 million. Trades during the past week averaged a total value per day of VND2.1. trillion (US$116.7 million).
While trading was also mixed on the Ha Noi Stock Exchange, the HNX-Index reflected greater weakness on the northern bourse, sliding 2.91 per cent over the course of the week to close on last Friday at 183.64 points.
Daily volumes averaged 10 million shares per day lower than in the previous week, at below 24 million shares, while the average value on the northern bourse reached VND989 billion ($55 million) a day.
The stressful sentiment that had prevailed on the market over the last couple of weeks was relieved by Wall Street recovering its feet, said Dao Viet Anh, an FPT Securities Co analyst.
"The Dow Jones surpassing 10,000 again, along with supportive news about the prospects for economic recovery, were the key to turning around the VN-Index for three consecutive sessions late last week," Anh said.
The State Bank of Viet Nam's decision to once again allow gold imports effectively stalled the heated advance of domestic gold prices and sent many speculators hustling back to the securities market, said Nguyen Hoang Hai, an analyst with a HCM City-based securities firm.
"In the context of advancing global markets, domestic gold prices skyrocketed from VND23 million a tael to nearly VND30 million in just four days," said Hai, noting the lines of buyers that began forming in front of gold shops when the price hit VND26 million.
But Hai doubted whether the end of the brief "gold storm" had really had any rebound effect on the stock market, noting that volumes still dropped over the course of last week.
Global Gold Co general director Lam Minh Chanh also said that a wall existed between these two investment channels. "The capital needed for gold investments is smaller than that for securities investments, which are supported to a high degree by leverage."
Only a few investors who trade in both gold and securities sold out gold to cycle capital back into stocks, he said.
Net buys by foreign investors on both stock exchanges were an additional supportive factor last week for a faltering market, with foreign investors focusing on property stocks, said Hai.
This sector bought a net of 7.9 million shares on both markets, for a combined value of VND354 billion ($19.7 million), favouring Hoang Anh Gia Lai (HAG) in HCM City and Kinh Bac Urban Development (KBC) in Ha Noi.
"The stock market will hardly be happy next week," added Anh, pointing to another decision forth-coming from the central bank restricting commercial banks from lending for the purpose of investing in equities such as securities and foreign currencies, as well as gold. Commercial banks have also raised lending interest rates, further restricting the profit margin for leveraged securities trading.
Anh predicted the VN-Index would range in the coming week between 530 and 560, and he recommended investors keep 40 per cent of their capital in cash.