HCMC – The local market bounced back on Wednesday given supporting news of interbank and lending rate cuts, with the VN-Index gaining 3.38 points, or 0.74%, from the previous session to close at 457.7. However, participation was still lukewarm, with the trade volume dropping and value merely inching up.
The market opened on a slightly weaker note and dropped 1.09 points to 453.23 after the first matching phase. It recovered slightly from the second matching phase and then moved higher to close at the highest level of the day.
Liquidity stayed low with 25 million shares worth VND698 billion traded, dropping by 17% in volume but increasing by 12% in value against the previous session respectively. On the southern bourse, bids rose 5.7% to 56.7 million shares while offers plunged 20% from the day earlier to 46.4 million shares.
Up to 135 stocks closed the day higher while 71 stocks lost ground, of which 11 issues hit their ceiling prices and three others closed at the floor prices.
Ocean Group Co. (OGC) remained the most active traded stock, advancing 2% to VND30,100 per share on the volume of 1.2 million shares, followed by Agribank Securities Co. (AGR) that jumped to its ceiling price of VND12,800 with around 950,000 shares traded.
Foreign trading improved as the investors bought 4.3 million shares worth VND162 billion and offloaded 2.5 million shares worth VND63 billion, making up 25% and 10% of the market’s buying and selling value respectively.
HCMC Securities Corp. in its comment said on Wednesday’s gain was important in technical terms as the market broke through all major moving averages. “But with volumes at these levels we should not put too much fate in technical moves like these. Investor interest remains very low and it seems that risk tolerance is extremely low at this moment,” said the stock broker.
“Although on Thursday’s move could gather some momentum over the coming days and put price a bit higher, we believe that there are other factors such as the large supply overhang that continue to keep a lid on equity prices. Therefore, any rally is likely to be short-lived for the moment and probably for the coming weeks. With valuations and dividend yields at very reasonable levels, especially if we compare them to a number of other markets in the region, we continue to recommend investors to accumulate positions on any correction,” the broker added.
The Hanoi market also recovered on Wednesday but turnover kept moving down to just VND370 billion. The HNX-Index inched up 0.58 point, or 0.48%, from the previous day to 120.39.
Out of the 344 listed stocks, 134 closed the day higher and 121 stocks closed down, of which four stocks hit the ceiling prices and seven others closed at their floor prices. Foreigners were net buyers to the tune of VND4.6 billion worth of shares.
