Favourable corporate news helped domestic stock indices advance last week, despite mixed trading on both the Ha Noi and HCM City bourses.

On the HCM City Stock Exchange, the VN-Index increased 19.5 points ovearall last week to close at 547.99, a rise of 3.69 per cent over the previous Friday's close.

Trading volumes averaged 55.3 million shares per day, down 23 per cent from the previous week's average, while the average daily turnover was VND2.4 trillion (US$134.8 million), a decline of 17 per cent.

On the Ha Noi Stock Exchange, the HNX-Index also ended 1.35 per cent higher at 169.18, a slight increase of 2.26 points.

Average trading value reached VND972 billion ($54.6 million), off 26 per cent from the previous week's average, as daily volumes averaged 28 million shares, a drop of 25 per cent.

Newly-listed shares from Viet Nam Real Estate (VNI), Hoang Long Group (HLG) and Van Phat Hung Co (VPH) all saw impressive gains after their debuts last week.

"A week of declines has not occurred as worried," said Nguyen Binh Duong from the FPT Securities brokerage department. "The impact of the news that Indochina Capital would liquidate its Viet Nam holdings ended quickly. This excited most investors and helped stimulate many newcomers to join the market."

Positive business results as well as news about bonus shares increase in capital by listed firms also spurred market growth despite unfavourable foreign investor moves on the domestic bourse, he said.

In HCM City last week, foreign investors were net sellers of 5.4 million shares, with a net value of about VND217 billion ($12.2 million). In Ha Noi, foreign investors finished the week as net buyers of 629,600 shares, worth VND27.2 billion ($1.5 million). Foreigner transaction levels remained modest, with the total volume for the week reaching only 36.7 million shares.

Rallies on major stock markets around the world also significantly supported domestic gains, Duong said.

"This boosted investor confidence in the recovery of the global economy in general and the domestic economy in particular, as well as their expectations for upcoming third-quarter corporate results," he added, predicting a short- to medium-term upward trend and likelihood that the VN-Index would range this week between 525 and 560 points.

Among specific sectors last week, real estate shares continued to gain significant value, driven by forecasts of positive results in the construction sector, according to a weekly FPT Securities Co report.

Viet Capital Securities Co analysts at a seminar last week also suggested investors pay attention to cement shares, saying that while the construction sector was still benefiting from the Government stimulus programme.

The price-to-earnings (P/E) ratio for domestic cement firms was now only 10, quite low compared to an average of about 20 on regional markets.

But they noted that long-term investors should be cautious about risks related to the sectoral characteristics such as high raw material costs.

Sacombank Securities Co, in a recent market review, pointed to investments in banking and financial shares, as the areas were now supported by a national credit growth target of 30 per cent and recent stock market rallies.

The review also said with a higher credit growth target and news about another possible economic stimulus package, September was expected to continue to see significant trading volumes and the VN-Index was likely to reach 580 in the short term.

Nguyen Thanh Ha, head of the Saigon Securities Inc economic analysis department, predicted that another stimulus package, if implemented, would not have such a strong impact on the stock market as the first had.

Any second package was expected to focus on economic restructuring, with small- and medium-sized enterprises in infrastructure and agriculture likely to be the main beneficiaries, Ha said. Few major listed firms would benefit.

A programme launched during the economic recovery would also be looking to medium- and long-term factors, so it would need more time to show effects than the first package, Ha added.

"Investors should have a long-term view about another possible stimulus package in order to avoid over-excited expectations based on how much the first package influenced on the market over the past few months," Ha said.