Market retreats after three days of gain

Phuong Thao

Liquidity of the Hochiminh Stock Exchange remained healthy with 94 million shares worth nearly VND1.7 trillion traded, rising 26% and 30% from the previous session respectively. There were over 17 million EIB shares transacted in block deals, pushing total value of the put-through market to nearly VND357 billion.

The results of the FTSE review were announced after trading hours last Friday with CSM, PET and PPC added while NTL and PGD were removed. According to the proposed weighting announced by the FTSE, 2.8 million shares of CSM, 3.2 million shares of PET and six million shares of PPC will be purchased while 2.2 million shares of NTL and 2.6 million shares of PGD will be sold by the exchange traded fund (ETF).

Despite the good news, PET and PPC closed the session with 2% and 3.6% loss respectively while CSM jumped 4%.

Viet Capital Securities Company said that this was due to selling pressure from large shareholders. Saigon Hanoi Fund, a large shareholder of PET, registered to sell 5.2 million shares within around one month starting from today.

“There is also talk that the Van Eck ETF will need to reduce its holdings of PPC because the weighting of the stock, currently at around 8% of its portfolio, has surpassed the ETF’s 6% threshold. Thus, CSM, with no such news of large shareholder divestment yet, was the only beneficiary of the FTSE news,” it said.

HCMC Securities Company (HSC) said that the market dropped back after recent gains due to net foreign selling towards the close. Recent volatility in the forex markets coupled with a little caution ahead of the National Assembly confidence votes might have played a role.

“HSC expects these votes to pass smoothly while we think normal liquidity patterns will also return in the currency markets over the next few days. The short- term bias in the equity market remains to the upside for now,” it said.

Vietcombank Securities Company said that rebalancing activities of foreign investors could surge following FTSE’s release of result of quarterly review, affecting the stock market. Therefore, investors should put an eye on foreign side’s moves so as to make proper decisions.

The Hanoi market closed almost unchanged on Monday while turnover expanded a tad to VND479 billion. The HNX-Index inched up 0.03% and ended the day at 65.6.