The stock market smoothly transitioned through its
first week with the newly expanded trading band, as the VN-Index topped
500 points.


The VN-Index closed last week at 526.98, up 7.78 per
cent, with 117 of 160 listed shares on the HCM City Stock Exchange
advancing.


At the beginning of last week, a new trading band of 5
percent (up from 3 percent) was set for the HCM City Stock Exchange,
allowing share prices to fluctuate within 5 per cent of a single day's
reference price.


The VN-Index closed last week at 526.98, up 7.78 per
cent, with 117 of 160 listed shares on the HCM City Stock Exchange
advancing.


The majority of the week's gainers were not hot
stocks. CYC of Chang Yin Ceramics rose 28.57 per cent to VND18,900, the
biggest advance of last week. SHC of Sai Gon Maritime Co was second, up
27.27 per cent to VND49,000, and SFC of Sai Gon Fuel third, up 27.07
per cent to VND39,900.


Good stocks like BMC of Binh Dinh Minerals or SJS of
Song Da Urban-IZ Investment & Development were also on the list of
gainers, with a smaller ratio of advancement.


BMC closed up 25.64 per cent at VND147,000, and SJS 25.58 per cent at VND108,000.


Gaining only minimally, blue chips were still the most
favoured stocks. During the week, familiar names like STB, DPM and HPG
of Hoa Phat Group, were repeatedly mentioned as the heaviest traded
shares.


STB saw 24.69 million shares traded last week, followed by DPM with 10.75 million shares and HPG with 7.72 million shares.


Thanks to the heavy volume of blue chips traded, the
market's overall trading volume last week rose 50.81 per cent over the
previous week to 130.6 million shares, generating turnover of VND5.10
trillion (US$308.79 million).


Bank caps


Last Tuesday, the State Bank of Viet Nam reaffirmed
the 30 per cent cap on foreign investment in local commercial banks, in
response to market rumours of foreign stakes rising in the sector.


The rumour came after foreign bank HSBC
(Hongkong-Shanghai Banking Corporation) received Government permission
to increase its 20 per cent stake in local Techcombank (Technical and
Commercial Bank of Viet Nam).


Last Wednesday, the VN-Index headed down to 508.47
after ten straight sessions of upward movement. The index then again
rebounded over the following two days.


According to many securities experts, SBV's decision came at a good time with investors not overreacting to the news.


The loosening of the foreign cap for local banks was
considered good-news for stock market development, and investors had
already assumed it would happen this year.


Luu Quoc Yen, deputy director of Sirifin Finance
Company, said that the seamless expansion of the trading band, along
with me SBV's decision, proved that investor sentiment had further
stabilised.


"This steadiness will help the stock exchange grow
smoothly in the remaining period," Yen added, also predicting that the
VN-Index would slow this week in comparison with last.