Liquidity eases, indices mixed

Saturday, Feb 22, 2014 12:17

Investors follow transactions at the ACB Securities Company in Ha Noi. — VNS Photo Viet Thanh

HA NOI  (Biz Hub) — Following losses on Thursday's trading, which witnessed an all-time high in liquidity, the VN-Index closed slightly lower yesterday.

The VN-Index finished at 570.57 points, a drop of 0.08 per cent, but 124 codes managed to increase, surpassing the losses of 96 codes.

The southern bourse's liquidity eased but remained at a high level yesterday, with more than 124.7 million shares traded for a value of VND1.98 trillion (US$94.28 million).

After the market posted record liquidity yesterday, investors entered trading that day with a sense of confusion in deciding whether to buy or sell, causing the VN-Index to experience strong fluctuations.

Shares dipped in the early part of the day but rose during the closing minutes of the morning trading session based on information heard at the State Securities Commission's conference that suggested increases in foreign stakes will soon be issued, reflecting investors' expectations.

However, the information was not strong enough for the benchmark index to finish yesterday with a gain because investors proved to be cautious about possible sell-offs.

With gainers overwhelming losers by 13-10, the VN30-Index managed to increase 0.1 per cent to end at 639.37 points.

Decliners included major players such as Vingroup (VIC), Hoang Anh Gia Lai (HAG) and Da Nang Rubber Corporation (DRC).

However, the trend on the northern bourse was reversed, with the benchmark indices closing in the black. After a loss in the early trading hours, recovery started in the last few minutes of the morning trading session and remained until closing time based on the foreign stake increase information.

The HNX-Index gained 0.83 per cent to reach 80.17 points, and the HNXFF-Index closed at 79.17 points, a rise of 0.66 per cent.

Tracking the 30 largest shares by capitalisation and liquidity, the HNX30-Index earned 0.85 points to reach 159.47 points.

With more than 72 million shares traded, the value reached VND708 billion ($33.71 million).

The net buying volume and value of the foreign investors decreased by 79.54 per cent and 76.58 per cent compared with Thursday's trading to reach 1.47 million shares and VND43.89 billion ($20.9 million), respectively.

The trading value on both national stock exchanges totalled VND2.69 trillion ($128 million), a decline of 51 per cent over Thursday's record high of VND5.5 trillion ($262 million), though this is still considered a high level.

With market liquidity remaining strong since the Tet (Lunar New Year) holiday, averaging roughly VND3 trillion ($142.8 million) and tripling the 2013 figure, some stock analysts have said that the potential of the capital inflows will be huge.

Tran Hoang Son, an analyst of Military Bank Securities, pointed out that with such high liquidity, macroeconomic improvements and the VN-Index's high growth rate of more than 20 per cent last year, the stock market was becoming a more attractive investment channel over gold or foreign currencies.

He added that the foundation of open-ended funds would also help create new capital inflows in the market.

Several securities noted that after Thursday's record liquidity, the market would face losses in the short term to prepare for new gains, and this did occur yesterday.

Still, they were optimistic about the market's potential for growth in the long term.

While, investors were divided, some kept buying, believing in long-term gains, while some sold for profit-taking and others worried about further slips.

Bao Viet Securities urged investors to keep a close watch on the market changes after Thursday's trading before making investment decisions since risks are high and the market trend is still unclear. — VNS

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