HA NOI (Biz Hub) — Vietnamese shares may continue rallying this week, as positive first-quarter performances and higher oil prices might prove to increase investor confidence, brokerage firms wrote in their weekly reports.

The benchmark VN Index on the HCM Stock Exchange on Friday recorded the biggest gain in the last three month at 2.9 per cent to finish at 592.48 points. Further, the southern index added 2.2 per cent from the previous week.

Meanwhile, the HNX Index on the Ha Noi Stock Exchange posted the largest growth rate of 1.6 per cent in the last nine weeks, to end at 80.94 points. The northern index earned 0.8 per cent last week.

"Investor confidence may remain positive due to better performances in this year's first quarter, compared to last year's, as announced by companies, which have matched investors' expectations," Sai Gon-Ha Noi Securities Corp (SHS) said.

Additionally, companies with the ability to lead local markets announced improved quarterly performances last week, including dairy firm Vinamilk (VNM), Sài Gin Securities Inc (SSI), property developer Vingroup JSC (VIC), Sai Gon Thương Tin Real Estate JSC, Sacomreal (SCR) and Phú Nhuận Jewelry JSC (PNJ).

Vinamilk reported a net profit of VND2.6 trillion (US$116.7 million) in the first quarter of this year, an increase of nearly two-fifth over one year. VNM rose 2.9 per cent in the last two trading days.

Property developers Vingroup and Sacomreal have also announced better earnings in the first quarter of this year, compared to one year ago. VIC surged 9.7 per cent in three days and SCR jumped 5.6 per cent in all four sessions of last week.

Better first-quarter performances, plus a low exchange rate between the Vietnamese đồng and the US dollar, attracted higher foreign investments in local stocks.

According to statistics announced by the two local exchanges, foreign investors last week posted a net buying value of VND475.2 billion, which was a significant improvement compared to a net foreign selling value of VNĐ268.3 billion from the previous week.

The daily reference mid-point rate set by Việt Nam's central bank early this year has been stable at some VND21,850 per dollar, since it fell from VND21,889 at the end of March after the US central bank announced it would raise interest rates at a lower pace during the remainder of the year.

Stronger foreign purchases also helped bolster investor confidence in financial firms, such as insurer Bao Viet Holdings (BVH), Vietcombank (VCB) and the Bank for Investment and Development of Viet Nam (BID). VCB last week surged 7.5 per cent, while BID jumped 6.3 per cent and BVH increased 5.7 per cent.

Additionally, higher global oil prices may lift energy stocks further, after latest statistics showed that production in the US and Colombia decreased last week, indicating that the market is rebalancing, and the Organisation of Petroleum Exporting Countries (OPEC) is planning new talks in May on a production freeze.

On Friday, both US crude and London-traded Brent crude gained 1.3 per cent each to close at $43.73 and $45.11 per barrel, respectively, rising 8.3 and 4.7 per cent over the week.

Local energy stocks, such as PetroVietnam Gas Corp (GAS), PetroVietnam Drilling and Well Service Corp (PVD) and PetroVietnam Technical Service Corp (PVS), all advanced during the trading week.

Both local markets last week exchanged more than 173.6 million shares each day, worth VND2.87 trillion ($127.6 million), a decrease of 9.6 per cent in trading volume and 7.2 per cent in trading value from the previous week. — VNS