The VN-Index managed a cumulative gain of 2.8 percent in the week prior to the Tet (lunar New Year) holiday, rising to 507 points despite sluggish volumes on the HCM City Stock Exchange, averaging less than 19.3 million shares per day.
Average daily values were an anaemic VND857 billion (US$46.3 million), down from VND1.2 trillion ($64.8 million) the previous week.
On the Ha Noi Stock Exchange, the HNX-Index gained a comparable 2.82 percent to close out the Year of the Ox at 164.66 points. The northern bourse also saw transactions slow to a trickle, averaging just 10.3 million shares per day, and an average turnover of VND329 billion ($17.8 million).
While domestic investors largely abandoned both markets in favour of focusing on preparations for the week-long holiday, foreign investors were quick to pick up on bargains, contributing to market rebounds last week, said FPT Securities Company analyst Tran Quang Vinh, who also pointed to the support given by favourable moves on global markets at mid-week.
In addition, sales by domestic investors seemed to slow in the final three sessions of the week, as the four-day resettlement period meant investors wouldn't be able to realise cash from sales until trading resumed after Tet, Vinh said.
Late in the final trading week before the holiday, the State Bank of Viet Nam issued a sudden decision to adjust the dong to VND18,544 per US dollar. Market analysts saw the move as positive for exporters, and another needed move to cool down the exchange rate pressures between commercial banks and the black market.
"For stocks, it'll have a rather long-term impact," said John Nolan, an analyst with a HCM City-based fund management company.
"This decision could drive the CPI higher in the coming months, and this could throw trading into an upheaval."
Ngo Van Minh of the Sai Gon-Ha Noi Fund Management Company said that stock markets in the Year of the Tiger would see volatilities reflecting the state of the economy and tighter policies to stem inflation.
Tiger years are typically marked by dramatic changes and upheavals, and 2010, much like the tiger itself, is likely to be energetic and powerful but unpredictable, according to Asia's leading independent brokerage and investment group, CLSA Asia-Pacific, which noted that the previous Golden Year of the Tiger was 1950, a year in which the Dow Jones gained significantly.
This company also wrote in its 16th CLSA Feng Shui Index report that those trading equities should get set to ride the wild tiger, and the markets would be volatile with a surge in the first month followed by a decline that turns upwards in June, dips, and then swings up again in September to see the Golden Tiger roar by January 2011.
"Once on a tiger's back, it's hard to get off," they wrote, quoting a Chinese saying, but they said that, if a person can hang on, it's the safest place to be.