return icon Vietnamnet.vn

Market to grow slowly amid ETF reviews, more selling

The Vietnamese stock market may move marginally up as investors look forward to foreign exchange-traded funds (ETFs) to complete their quarterly investment reviews.

 

 

Trading activity at Vietcombank head office in Ha Noi.

 

 

The US-based iShares MSCI Frontier 100 ETF on Friday completed its quarterly review.

The fund’s quarterly review had little impact on the local stock market and the market ended slightly up as investors waited for its final results.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange rose 0.36 per cent on Friday to end at 864.47 points

After iShares MSCI Frontier 100 ETF, the London-based FTSE Vietnam ETF is expected to announce its new list of investees on June 6.

According to SSI Securities (SSI), the British ETF will not make any changes to its investment list this time. Instead, the fund will just re-calculate the proportion of local stocks in the portfolio.

Calculation had been expected to complete on May 29. Target stocks in FTSE Vietnam ETF’s list are large-cap firms.

In a recent report, SSI Securities’ research unit forecast FTSE Vietnam ETF will increase investment in three stocks – Vingroup (VIC), Vinhomes (VHM) and Vietcombank (VCB).

Vingroup and Vinhomes shares will account for 15 per cent of the total portfolio, up 0.5-1.11 percentage points while Vietcombank shares will take an 8.65 per cent stake in the list, up 2.22 percentage points.

The fund is forecast to cut its investment in the remaining 15 stocks such as dairy producer Vinamilk (VNM; down 1.69 percentage points), Vincom Retail (VRE; down 0.28 percentage points), and steel maker Hoa Phat (HPG; down 0.32 percentage points).

“Investors will become cautious in the week that ETFs carry out their investment review, so trading may focus on small-cap and medium large-cap stocks,” MB Securities Co (MBS) said in a note.

But the quarterly review by ETFs is not the only thing that matters. A possible downturn of local purchasing power may affect the market’s short-term uptrend, according to analysts.

Individual investors have played a big role in driving the market upwards from its three-year bottom on March 24 as stocks were sent down to very cheap, attractive price levels.

The benchmark VN-Index had gained significantly by nearly 31 per cent in two months from March 24 to May 21. That made the Vietnamese stock market one of the best-performing markets in the world in April and May.

But growth slowed down last week to 1.37 per cent with alternate ups and downs during the week. Analysts are expecting more bumpy sessions in the coming weeks.

Phan Dung Khanh, investment director at Maybank Kim Eng Securities (MBKE), said purchasing power of domestic investors – most of them are individuals – was still strong enough to lift the market last week while institutional investors – most of whom are foreign – were only willing to sell.

The escape of institutional investors, considered “big money”, and limited resources of individual investors may drag on the local markets in coming weeks, he told tinnhanhchungkhoan.vn.

“Higher market valuation and a slow-recovery economy increase the risks on the local stock market,” he said. “The price-to-earnings (P/E) ratio of the Vietnamese market is rising fast, so it will naturally slow down the market growth in June.”

Agriseco’s investment and analysis director Nguyen Anh Khoa said new investors, who opened accounts in late March to hunt for cheap stocks, were the major driving factor of the stock market in April and May.

“Most of their investments have gained 20 per cent. But they will just run away as quick as they come,” he said. “Lower second-quarter corporate earnings will also encourage investors to divest from local companies.”

“But disappointing earnings have been widely expected, so selling pressure would not be harsh on local stocks and the market can absorb such pressure,” Khoa said. — VNS

MORE NEWS

First Vietnamese victim in Manchester fire identified through fingerprint

Partial human remains recovered from Bismark House Mill in the UK have been identified, through fingerprint analysis, as Nguyen Van Uoc, according to the Vietnamese Embassy in the UK, citing an announcement on August 12 by Greater Manchester Police.

Vietnam seeks foreign investment in medical devices production

The Vietnamese medical devices market, which is growing annually at more than 18%, relies heavily on imports, representing significant opportunities for foreign businesses, according to the Ho Chi Minh City Medical Equipment Association.

North-South express railway to seek Politburo’s approval

The Ministry of Transport will submit to the Politburo for consideration an investment policy for the construction of a North-South express rail link, which would cost up to 58.71 billion USD, this September.

VIETNAM NEWS HEADLINES AUGUST 14

Trains to increase during National Day holiday

Challenges for supermarket chains

The recent shutdown of multiple Bach Hoa Xanh (BHX) stores has been the talk of the town for the past few weeks. What prompted the leadership of this grocery store chain to come to such a decision despite the considerable growth in total revenue?

Re cakes: Phan Thiet’s specialty sweet treat

Re cake, a specialty of Phan Thiet City, Binh Thuan Province, tastes so delicious that no visitor can resist it.

A new move for open market operations

The State Bank of Vietnam (SBV) has recently made a new move regarding open market operations (OMO). Valuable papers are purchased at a competitive interest rate, instead of a fixed rate as before.

An insight into Vietnam’s indebtedness

National debt, or foreign debt, when reaching an excessive level, often leads to an economic crisis.

Nguyen eyes bigger competition after ASEAN Para Games wins

Tran Van Nguyen stands only 1.27m and has short arms and legs. But he has dominated the top podiums of many competitions.

Vietnam to have national marine spatial plan by 2030

A national marine spatial master plan is being developed, aiming to fuel the sustainable development of marine economic clusters and establish sea-based economic hubs by 2030.

Digital business lines developing well

Major tech companies are looking to expand in Vietnam, on the back of strong hardware export and IT figures for the country's telecom industry so far this year.

Vietnam targets launch of modern digital finance platform by 2025

Minister of Finance Ho Duc Phoc has signed a decision promulgating the Ministry of Finance's digital transformation plan to 2025, with vision to 2030.

Vietnam, Southeast Asia find ways to rise amid difficulties

Vietnam and the Southeast Asian region have managed to maintain economic stability and growth despite COVID-19 and the Russia-Ukraine conflict, according to experts.

CPI method of calculation is correct: economist

“Someone told me they had a feeling that the CPI is not correct. I asked them on what grounds. Scientifically, that cannot be proven,” said economist Vo Tri Thanh.

Real estate market is gaining balance: ministry

The real estate market of Vietnam showed signs of recovery and more balanced development in the second quarter of this year with increases in the number of successful transactions of apartments, houses and land.
back_to_top