Depressed investor sentiment drove the VN-Index down
to a three-year low in the middle of last week before a rally on Friday
brought the market to only a modest overall loss on the week.


The Index was down 4.22 points to 314.74, a loss of just 1.3 per cent from the previous Friday's close.


Daily volumes remained low, with only an average of
about 11.3 million shares changing hands per day, 3.5 per cent lower
than the previous week's average. Daily values were around VND293.5
billion (US$17.8 million), a decline of 1.1 per cent.


Among the few bright spots in last week's trading,
according to FPT Securities data, were shares in the tourism sector,
gaining 3.17 per cent, followed by healthcare at 1.72 per cent and
retail at 0.39 per cent. Food and beverage shares, building materials
and household products were among areas dedining the most, all dropping
around 8.2 per cent on the week.


The analysis department at SME Securities Co expressed
optimism that the VN-Index plunging below the psychologically important
300-mark would stimulate demand for shares. They expected the market to
maintain that supporting mark of 300 this week, absent any additional
bad news.


Good news for the domestic market last week included
the Government's announcement on Tuesday that the nation's inflation
rate had slowed for a second consecutive month and that foreign direct
investment inflows continued to increase, totalling US$59 billion so
far this year.


Market researchers said that sharp recent cuts in both
deposit and lending interest rates had spurred investment in a number
of sectors.


Nevertheless, industrial production was at an 11-month
low in November, and a seminar on the business climate held last week
heard that it would be difficult for the economy to achieve 6.5 per
cent growth in 2009.


The tourism sector has also seen dramatic declines in
foreign visitors over the last few months - all due to the global
economic downturn, according to Government reports.


The global slowdown was also expected to reduce
foreign-investment influx by half next year, said director of the
Ministry of Planning and Investment's Foreign Investment Agency Phan
Huu Thang.


On the stock market, foreign investors last week
continued to pull capital out of the market, with net sales for the
week totalling VND151 billion ($9.2 million) and total sales
accelerating by 28 per cent over the previous week to about 13.5
million shares.


"The way I look at it, a slowing market opens
opportunities for long-term investors," said Dinh The Hien, a financial
expert. "The rest of the year is an opportunity for those who seek for
profits over the next two years."


FPT Securities Co analyst Tran Quang Vinh said early
week trading developments would determine market trends for all of the
coming week. If both HCM City and Ha Noi markets increased early in the
week, the market might see an upward trend over the short term, he
said, but if the indices fell, the market might hit a new rock bottom.


"We can't say about a market rally from Friday's
rebound," said Vinh. "Recent fluctuations on the world and domestic
stock markets have badly affected investor sentiment."


Vinh said he expected the VN-Index to range between 300 and 330 points this week.


In Ha Noi last week, a dramatic rebound on Friday
helped the HASTC-Index gain a modest 0.28 per cent overall to end at
104.2 points, despite slumping to its all-time lowest level in
mid-week. Activity remained sluggish with an average daily trading
volume of under 7.6 million shares and a daily turnover of VND189
billion ($11.5 million).


The HASTC-Index would likely range between 95 and 115 points this week, predicted Vinh.


Tran Van Dung, director of the Ha Noi Securities
Trading Centre, said more positive moves on the world market were
needed to stablise investor psychology.


"A prolonged world economic crisis makes investors
cautious about measures taken by the US and EU governments," said Dung.
"They doubt whether the measures can work.


"Investors should note that, as many international
organisations have foreseen, the world economy is still facing
difficulties but is gradually stabilising," he added.


To encourage investors, Dung urged domestic
authorities to postpone the imposition of new income and capital gains
taxes on securities trading, which were slated to take effect on
January 1.