Accelerating speculative trades sent shares down on the HCM City Stock Exchange last week, with the VN-Index losing a cumulative 0.51 per cent from the previous week's close to end the day Friday at 510.37.
Average daily trading values also dropped by 3.81 per cent to just VND1.3 trillion (US$68.4 million), with an average volume of less than 40.7 million shares.
Penny stocks continued to garner the most investor favour, with MT Gas Co (MTG) advancing by a market-leading 26.5 per cent on the week, and Idico Urban and Housing Development (UIC) not far behind at 23.5 per cent.
On the Ha Noi Stock Exchange, the HNX-Index lost over 3 per cent of its value last week to close on Friday at 161.68 points. Trading volumes remained modest at an average of 30.3 million shares, a decline of 14.8 per cent from the previous week. The average daily value of trades, meanwhile, dropped below the VND1 trillion level to just around VND993 billion ($52.2 million).
Song Da Industrial Trade (STP) posted the greatest advance on the northern market, picking up 37.4 per cent on the week, followed by Cai Lay Veterinary Pharmaceutical Company (MKV), up by over 32 per cent.
The major capital flowing into the markets was speculative and deliberately focused on penny stocks, commented Tai Viet Securities Company analyst Nguyen Quang Minh, noting that blue chips were largely stagnant and that banking and financial shares had slid by 2-3 per cent.
Minh suggested that trading on the Ha Noi market could be busier this week than on the HCM City market, due to the concerns over the weakness of the VN-Index.
Investors were sceptical of the stability of domestic market rallies in the context of the uncertain global situation, agreed Dao Van Khanh, an analyst with a Ha Noi-based securities company. To try and shield themselves from the global impact, he said, domestic investors were looking mostly to penny stocks.
How much capital would continue to flow into the stock markets would now depend on credit growth. "High interest rates lead to low credit growth, then capital injection," he said.
In the context of low inflation and a stable foreign exchange rate, a change in monetary policy might be a happy call for the stock market, he added.
"This month, a change in interest rates and credit growth would be supportive to stock markets even as global conditions are still reflected in local trades," Khanh said.
"A low credit growth policy instituted months ago could encourage the central bank to loosen monetary policy," agreed Minh.
"A lower interest rate could cheer up the market," he added.
Last week, three member funds of Dragon Capital began selling 19 million shares of Sacombank (STB) in an effort to restructure their investment portfolios. Before the sale, these funds held a total of 70.5 million STB shares, representing a 10.5-per-cent stake in the bank.
Nevertheless, foreign investors still racked up a 13th consecutive week as net buyers on the nation's stock exchanges, picking up a combined net of 87,000 shares worth 48.8 billion ($2.5 million). Property stocks like Song Da Urban & Industrial Zone Investment and Development (SJS) and Hoang Anh Gia Lai (HAG) were among the most-attractive to this sector.
In the coming week, FPT Securities Company analyst Tran Van Quy predicted that capital would continue flowing to small- and mid-caps, while blue chips would likely remain at the whim of the global economic situation.
"The market will tread water, with the VN-Index ranging between 495 and 535 points," Quy said.