VietNamNet Bridge – Trade value and volume fell sharply on both national stock exchanges last week, with analysts forecasting that markets were likely to see sideway movements this week if there's no positive news to buoy investor confidence.

On the HCM City Stock Exchange, the VN-Index rose slightly by 0.15 per cent over the course of last week, closing Friday at 494.66 points.

However, market volume and value fell steeply. The daily trading volume decreased by 43 per cent from the previous week to 32.6 million shares and the value of trades dropped by 55 per cent, averaging nearly VND650 billion (US$31 million) per session.

Trading on the southern market was dominated by movements of heavyweight shares such as Vinamilk (VNM), Masan Group (MSN), VinGroup (VIC) and PV Gas (GAS). These shares helped sustain the Index.

The VN30 measuring the top 30 shares by market capitalisation and liquidity was also up 0.13 per cent over the week, reaching 545.59 points.

Meanwhile on the Ha Noi Stock Exchange, the HNX-Index climbed 1.46 per cent during the week to 62.20 points but trading also fell sharply. Only 12.3 million shares worth VND101.6 billion ($4.8 million) were exchanged per session, down 42 per cent in volume and 38 per cent in value compared to the previous week's levels.

Net sales of foreign investors also had negative impacts on domestic investor psychology last week. On the HCM City Stock Exchange, the foreign sector unloaded shares worth nearly VND73 billion ($3.5 million), but they were still net buyers for a modest value of VND4.4 billion ($210,000).

According to analysts at FPT Securities Co, increases by stock indices last week were being led by several blue chips. With such low liquidity now, a stable recovery is unlikely in the short term, particularly following the recent power price hike that will directly affect manufacturing companies such as seafood processors and steel and cement producers.

From this month, prices of many essential commodities including electricity, gas, milk and foodstuff all increased.

"Second-quarter financial reports by listed companies did not support the market. Out of 374 companies submitting reports, 184 companies posted higher profits compared to the same period of last year," analyst from FPT Securities Co Le Thi Bich Hang wrote in a report.

Hang said HSBC's Purchasing Managers Index (PMI) improved from 46.4 in June to 48.5 points in July but was still below 50, indicating manufacturing activity is still shrinking. In addition to the 5-per-cent increase in electricity prices, businesses would likely continue to face difficulties in the latter half of the year.

"If there is no new data to support the economy this week, the market will continue to go sideways. It's risky for speculative investors to join the market at present," Hang said.

Despite the current pessimism on the local market, the Vietnamese stock market is still one of the two best performing markets in Asia with a growth of nearly 20 per cent since the beginning of the year, behind Japan's 35 per cent rise, according to Reuters data released last week.

Source: VNS