Shares retreat on low liquidity

Tuesday, Jan 21, 2020 07:03

A chilled meat processing line at a factory of Masan Group (MSN) in the northern province of Ha Nam. MSN lost 1.3 per cent on Monday. — Photo courtesy of Masan Group

The market experienced an uneventful trading day Monday with sideways movements and slight fluctuations among declining liquidity.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange edged down 0.03 per cent to close at 978.63 points.

The benchmark index gained 0.48 per cent to close last Friday at 978.96, recording a growth of 1.07 per cent last week.

More than 148.8 million shares were traded on the southern bourse, worth VND3.9 trillion (US$167.9 million).

The large-cap VN30-Index rose 0.29 per cent to close at 897.40 points with 10 of the 30 largest stocks by market capitalisation and trading liquidity falling.

The market continues to experience a divergence among stock sectors.

Wholesale, insurance, real estate, securities, information and technology, oil and gas, banking, agriculture, rubber production, food and beverage and logistics all lost ground.

On the opposite side, retail, seafood processing, construction and healthcare were among the gaining sectors.

Pillar stocks have differentiated strongly in Monday’s session with gainers including VPBank (VPB) (+2.7 per cent), steel maker Hoa Phat Group (HPG) (+2 per cent), Mobile World Group (MWG) (+2.2 per cent), brewery Sabeco (SAB) (+0.6 per cent), dairy firm Vinamilk (VNM) (+0.3 per cent), Vietinbank (CTG) (+0.6 per cent), PetroVietnam Gas JSC (GAS) (+0.2 per cent) and Phu Nhuan Jewellery (PNJ) (+1.4 per cent).

In the opposite direction, other blue-chips were remained hardly troubled such as Vietcombank (VCB) (-0.5 per cent), Vincom Retail (VRE) (-1.8 per cent), Masan Group (MSN) (-1.3 per cent), Bank for Investment and Development (BID) (-0.4 per cent), Vietjet (VJC) (-0.8 per cent) and Bao Viet Holdings (BVH) (-0.8 per cent).

According to Bao Viet Securities Co, since 2010, the market has usually rallied in about 10 sessions before the Tet (Lunar New Year) holiday. The market rallied for 9 out of 10 observed years with an average increase of about 4.57 per cent.

“However, market liquidity often shows signs of decline during this period. According to our observation, only three out of 10 observed years, trading volume increased in 10 sessions before Tet and only four out of 10 observed years, trading value increased. The average decrease of trading volume was -16.43 per cent and of trading value was -17.25 per cent,” BVSC said.

“Investors usually restructure loans before and avoid holding loans during Tet. However, notably, according to our statistics, the market also usually increases in 10 sessions after Tet holiday but with a strong increase in trading volume and value.”

“In eight out of 10 observed years, VN-Index increased with an average increase of 4.31 per cent. Trading volume increased over 8 out of 10 years with an average increase in those eight years at 45.03 per cent and trading value increased in nine over 10 years with an average increase of 40.31 per cent.”

BVSC said investors should take advantage of market’s prior Tet sessions to buy, sell and hold stocks. In addition, investors can safely hold and maintain a proportion of stock exposure through the Tet holiday with 80 per cent probability the market will continue to increase after Tet. The market often receives support from booming transaction volumes and values.

On the Ha Noi Stock Exchange, the HNX-Index rose 0.73 per cent to end at 104.64 points.

The HNX-Index ended last week at 103.88 points, up a total 1.62 per cent after one trading week. — VNS

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