VN-Index ends nine-week gains
The benchmark VN-Index has ended its winning run of nine consecutive weeks under heavy profit-taking selling pressures. The market is forecast to remain volatile due to ongoing portfolio restructuring of exchange-traded funds.
Transactions at the Military Bank Securities stock exchange
On the HCM Stock Exchange, the VN-Index decreased 0.3 percent for the week, closing Friday at 712.6 points, and narrowed its yearly gain to 7.2 percent.
Large-cap stocks have lost their growing momentum, as investors increased selling in these stocks and channeled money in speculative investments to seek larger returns.
Leading stocks in their industries, such as dairy firm Vinamilk (VNM), PV Gas (GAS), IT group FPT (FPT), Saigon Securities Inc (SSI) and Military Bank (MBB), all slumped last week.
Among gainers, shares of budget airline Vietjet (VJC) soared 46.8 percent in value since its debut on February 28, reaching 132,100 VND (5.79 USD) per share.
FLC Faros Construction (ROS) recorded the longest running streak, rising constantly since December 14, 2016. Its share price has climbed 51.5 percent in nearly three months to 152,700 VND.
FTSE, a London-based index provider, announced on March 3 it would add shares of FLC Faros and two other property stocks, including Hoa Binh Construction (HBC) and Dat Xanh Real Estate Service and Construction (DXG), into its FTSE Vietnam Index in the first quarterly review of 2017.
Meanwhile, the 250 million USD exchange-traded fund will remove five other Vietnamese stocks from the basket for the index calculation. The changes take effect on March 20.
Except for ROS, two other firms had negative performances last week. HBC shares decreased 4.5 percent in value, while DXG fell 1.1 percent last week.
“The market is expected to be volatile in the coming week, with a focus on ETF’s actions,” said Tran Duc Anh, a stock analyst at Bao Viet Securities Co.
Besides FTSE, VanEck Vectors Vietnam ETF is expected to announce its first quarterly review on March 10.
According to Anh, although selling pressure was generally quite strong, positive developments in other large-cap stocks, such as FLC Faros, Vietjet, Vietcombank (VCB) and brewery Sabeco (SAB), still provided good support for the marker, Anh said.
Among speculative stocks, realty stocks remained a magnet thanks to large profits last year, as well as a positive 2017 outlook.
Dat Xanh Real Estate Service and Construction Corporation gained 66.8 percent this year, while Haa Binh Corporation (HBC) gained 35.5 percent. Khang Dien House Trading and Investment JSC (KDH) and Novaland Investment (NVL) increased 13.6 percent and 16.5 percent, respectively, this year.
Liquidity decreased on the southern bourse last week, with daily trading volume averaging nearly 189 million shares, worth over 3.3 trillion VND (145.6 million USD) per session, down 14.5 percent in volume and 13.3 percent in value compared to the previous week’s figures.
“The market is segmented and the risk increases in hot rising stocks,” analysts at Vietnam Securities Co warned in a report, noting the VN-Index could retreat to 710 points, before bouncing back on bargain demands.
On the smaller exchange in Hanoi, the HNX-Index increased 0.4 percent for the week, ending March 3 at 86.65 points with an average 55.4 million shares, worth 527 billion VND (23.1 million USD) traded in each session.
Foreign investors concluded the week as net buyers on the two exchanges, for a combined net value of 257 billion VND. Their purchases focused on hot tickers, such as Vietjet, Hoa Phat Group, Vinamilk and FLC Faros.