Viet Capital Securities Company (VCSC) said that index rebalancing continued to dominate market talk.
There was some apprehension this morning as both indices briefly fell into negative territory with investors fearing a repeat of Tuesday’s ATC (at the close) sell-off. But stocks gradually climbed throughout the day and blue-chips, led by BVH, GAS, and VNM, rallied at the end, helping the VN-Index rise 3.95 points, or 0.77%, to close at 514.64.
However, liquidity on the southern bourse was down around 30% against the previous day, showing that investors were not ready to go all in yet with FTSE’s index review date coming up on Friday.
Foreigners continued to sell shares on the southern bourse but the pace slowed down. Foreign outflows was VND58 billion, down from VND123 billion on Tuesday.
“Recall that yesterday’s ATC sell-off was speculated to be attributed to the FTSE. Today there’s data showing that they were redemptions a couple days ago, which backs up that theory,” the broker said.
VCSC also noticed that there has been profit taking on developers of affordable home projects.
Nam Long Group (NLG) has seen its stock price jumped over 64% from a recent bottom of VND16,300 on May 3 as investors speculate that the developer of affordable homes will see a surge in home sales from the Government’s subsidized home loan package. However, the stock failed to break the VND26,600 mark for the second time in as many days as investors start taking profits, it said.
“We could start to see more profit taking on other affordable home developers like TDH, which has risen 31% since April 22, and DXG with a 24% rally since May 2 as enthusiasm from the loan package wears off,” the broker said.
HCMC Securities Corp. said that the market saw a mild recovery but liquidity fell noticeably on Wednesday. This is a worrying sign as it suggests a loss of momentum even as prices moved higher on the whole.
“We keep our cautious short-term view that the market will struggle to push beyond recent highs for the time being. Hence, we would take profits in leading stocks although we are still comfortable buying laggards,” it said.
The Hanoi market also made some ground on Wednesday although turnover declined to VND275 billion. The HNX-Index gained 0.75 point, or 1.18%, and ended the day at 64.54.