After three days of haemorrhaging value, stocks stabilised on both the HCM City and Ha Noi exchanges yesterday, on heavy trading.

On the southern market, the VN-Index snapped a three-day losing streak and managed a neglible gain of 0.11 per cent before ending Wednesday’s trading at 472.47. Trading volume rose by 80 per cent over Tuesday’s total to 62.4 million shares, worth a combined VND2.5 trillion (US$140.5 million).

Up north, the HASTC-Index advanced 1.21 per cent to end the day’s session at just over 167. The value of the day’s trades was VND1.4 trillion ($78.7 million) on a volume of 41.2 million shares, nearly double the volume of Tuesday’s trades.

Huge sales early in yesterday’s session caused the prices of most shares to hit the floor of their regulated trading bands, but a spike in demand – particularly for blue chips – helped the indices bounce back by the end of the day.

"Three consecutive days of losses were a necessary step back for the VN-Index to accumulate for a new wave of increases, with today being the start," opined FPT Securities Co in a report.

Banking and financial shares continued to show the heaviest activity, as Sacombank (STB) led the HCM City market with a volume of 17.3 million shares, followed by Saigon Securities Inc (SSI) with 5.5 million. Asia Commercial Bank (ACB) led the northern exchange with 7.2 million shares traded, followed by Kim Long Securities (KLS), with 4.5 million.

Real estate shares also continued to pique the interest of investors, according to FPT Securities, with buys of Tu Liem Urban Development Co (NTL) and Song Da Urban-Industrial Zone Investment and Development Co (SJS) helping prop up the market.

The director of the State Securities Commission’s market development department, Nguyen Son, suggested investors exercise caution.

"The market is over-heated, with the last few weeks seeing an average market growth rate of 5 per cent per day," said Son. "This means there is a potential for [downward] adjustments, and it’s difficult to predict to what level the market will adjust."

While Kim Long Securities Co analysts said the Index might slump to as low as 415 if global developments were negative, "in our opinion, increases are still the medium-term trend for the VN-Index".

Foreign investor transactions continued moderate yesterday, with foreign investors responsible for 6.1 million shares changing hands. They finished the day as net sellers of 2.3 million shares, with a net value of VND104.3 billion ($5.9 million).

While Son admitted that growth in foreign investment capital inflows into the domestic stock market had slowed over the last few months, "there’s no sign of foreigner withdrawal from Viet Nam," he said.

"About net sales by foreign investors, especially foreign investment funds, I think now is the time that they are restructuring their portfolios," said Son. "From the time they bought in up to now, there are stocks that have increased up to 200 per cent in value, and it’s good for materialising profits."