Three-year high brings better outlook

Phuong Thao

The VN-Index ended last week up 1.36% and closed at 527.97 while turnover on the Hochiminh Stock Exchange in southern Vietnam improved slightly to nearly VND1.3 trillion. The HNX-Index of the Hanoi Stock Exchange also gained 0.38% and ended the day at 65.58.

However, foreigners net sold for a sixth straight day on the southern bourse while VIC accounted for half of the net selling value. They were also offloading GMD and HAG during the week.

On the northern exchange, they net sold VND31 billion worth of shares, the biggest single-day net selling value since early this year. It seemed that the investors were taking profits out of the table as they mainly offloaded CSM, DRC, HSG, PET, REE and TDH, which had strongly advanced in recent weeks, Viet Capital Securities Corp. (VCSC) said in its report.

HCMC Securities Corp. (HSC) noted the FTSE Vietnam Index announced the results of their quarterly review last Friday. They have deleted PGD and NTL from the FTSE Vietnam All-Share index.

The two stocks were removed because they no longer meet their rules. NTL did not fall within the top 92% market capitalization of stocks. Meanwhile, PGD did not achieve turnover of at least 20% of the FTSE Vietnam All-Share Index in the three-month average daily traded value.

Then FTSE added PPC, CSM and PET as the three met the conditions on size, liquidity, free float ratio and foreign ownership availability. As of now, FTSE has not yet announced the new stock weightings in their new index portfolio. They just noted that all constituent changes will be applied after the close of business on Friday, June 21, and will be effective on Monday, June 24.

“In the review back in March 2013, FTSE announced the quarterly review on March 1 then they published the new stocks weightings on March 15, after a wait of two weeks. We suppose the same interval on this occasion,” HSC said.

Vietcombank Securities Company said that indicators of strength and cash flows rebounded, signaling positives after corrections since the end of the previous week. Last Friday’s gains sent the indexes of both exchanges to new highs which would lead to a surge in selling, gauging the strength of demand force.

“The market, therefore, would display a mixed performance with gains and losses alternating in the accumulation stage. The liquidity might stay at a modest level. Based on this assumption, we keep our recommendation that the ratio of stock/cash should be maintained at a reasonable level,” the broker said.