Friday's surprising correction caused a decline in shares on both national stock exchanges, with VN-Index closing out the first full week of September at 451.29 points, 1.6-per-cent lower than the previous Friday's close. Rumours began to circulate among online investor groups on Friday that the State Bank of Viet Nam's review of Circular No.13, which would set stricter capital adequacy requirements on commercial banks, would possibly focus on technical elements rather than some of the more controversial aspects of the regulations.
The State Bank had announced late Wednesday that it would review the circular in reponse to an outcry in the banking sector and a Government directive.
Investors turned more cautious on the likely scale of any revisions to the circular, however, and this exacerbated the usual temptation to exit the market at the end of the week, said analysts from HCM City Securities Company in a report on Friday.
A small revision might in fact be seen as good news since it would mean most banks were close to compliance already, they said.
"A major revision would signal bigger problems in the banking system, while a small revision would suggest only small problems. But that might take some time to sink in."
The volume of trades on the HCM City Stock Exchange last week surged by nearly 17.9 per cent to an average of over 51 million shares per session. Values averaged VND1.3 trillion (US$66.7 million) per day.
On the Ha Noi Stock Exchange, the HNX-Index fell by 0.39 per cent over the course of the week to close on Friday at 131.51 points. Volume rose by over 35 per cent over the previous week to nearly 50.2 million per session, with an average daily value of VND1.2 trillion ($61.5 million) – putting the northern bourse on a near parity with the southern bourse in volumes and values.
"The improvements in trading volume and the activeness of money flows are a good sign for the market, even in profit-hunting sessons," said Dao Van Khanh, Deputy Director of a Ha Noi-based securities firm.
However, the flows began to move toward low-priced stocks, signalling the return of speculative trading, Khanh said.
"The increased levels of activity will be retested next week," he said. "Market indices can achieve higher benchmarks, with the assistance of foreign investors."
Foreign investors continued as net buyers throughout the week on the HCM City market, picking up a total of 6.75 million shares worth VND261.6 billion ($13.5 million). This sector focused on blue chips such as insurer Bao Viet Holdings (BVH) and software giant FPT.
Le Quang Vinh, a market analyst for FPT Securities Company, said that market movements were being governed by sentimental factors, presenting challenges for further growth.
Vinh predicted the market would tread water this week, with the VN-Index to retest the 448-level before a clearer trend could be confirmed. He forecast a VN-Index ranging between 430 and 475 throughout the week.
Today, the HCM City Stock Exchange begins extending the hours during which continous order matching takes place. Under the adjusted system, the opening and closing sessions of periodical order matching will each be shortened to just 15 minutes, while trading under the continuous order matching method will be lengthened to a total of 105 minutes per day.