Heavy foreign investor buys boost stock market

The VN-Index rose yesterday on heavy late buys of blue chips by foreign investors, finishing the session at 450.96 points, a gain of 1.15 per cent.

Volume on the HCM City Stock Exchange fell by nearly 34 per cent, however, to 32.75 million shares, worth a combined VND835.2 billion (US$42.8 million). 

Advancers outnumbered decliners by 131-72, with Ocean Group (OGC) continuing as the most-active share on a volume of 1.6 million trades. OGC rose by 2.32 per cent to close at VND30,800 ($1.58) per share. 

Eight of the 10 leading shares by capitalisation advanced, with insurer Bao Viet Holdings (BVH) hitting its ceiling price with foreign investors accounting for 92 per cent of its volume. 

Foreign investors also accounted for 97 per cent of the volume of software giant FPT, helping lift share prices by 1.4 per cent, while Phu My Fertilisers (DPM) also rose 1.63 per cent with foreign investors accounting for 80 per cent of buys. 

Overall, foreign investor were responsible on the HCM City exchange yesterday for a net buy of over 3.8 million shares worth a combined VND142 billion ($7.3 million). 

Bao Viet Securities Co analyst Tran Hai Yen said the wave of new foreign investment could come from new investors. 

In September, the Viet Nam Securities Depository granted trading licences to 75 new foreign investors, of which 17 were institutional investors, lifting the total number of foreign investors to 14,577 on both exchanges. 

Unfavourable economic indicators, including rising inflation, a high trade deficit, and an unstable foreign exchange rate continued to weigh on the prospects for market development in the minds of domestic investors, Yen said. 

Beta Securities Co analyst Bui Quang Duy said market declines over several sessions had caused many domestic investors to become cautious and sit out trading, driving down both volumes and values. 

However, the market was also not likely to plunge since any negative information has been absorbed during recent weeks, said Duy, predicting "the market will likely fluctuate within a narrow band due to a lack of strong new investment." 

Vietnam International Securities Co analysts said demand increased when the index fell back to around 440 and rising foreign buys now were expected to positively influence domestic investor psychology. 

On the Ha Noi Stock Exchange yesterday, the HNX-Index managed a gain of 0.91 per cent to close at 122.02. 

Market volume declined by 29 per cent from the previous day’s level to 31.3 million shares worth VND720.3 billion ($36.9 million), with gainers outnumbering decliners by 171-96. 

Without the support of foreign buys, blue chips on the northern bourse tumbled, with all 10 of the leading shares by capitalisation declining or closing unchanged. 

PetroVietnam Construction (PVX) was again the most heavily traded share nationwide, with 3.4 million exchanged, but PVX lost 0.45 per cent to close at VND21,900 ($1.12). 

Foreign investors were responsible for a net buy on the Ha Noi market of VND7 billion ($359,000) worth of shares.

VNS