VietNam Business: stocks

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Sunday, February 6, 2011

US dollar drops on Singapore action, gold climbs

HONG KONG - The US dollar fell broadly to a 10-month low on Thursday after Singapore unexpectedly tightened policy by letting its currency strengthen, lifting Asian stocks and copper to two-year peaks and gold to a record high.

Major European stocks opened higher, mirroring gains in Asia, with the FTSEEurofirst 300 up 0.3 percent in early trade to 1,089.22.

The move by Singapore, viewed by analysts as a preemptive strike before policy loosening by the US Federal Reserve sends more investment to Asia, underscored the global currency tensions that have sparked a war of words among some policymakers.

Indeed, the dollar's decline to near parity against the Australian dollar and a 15-year low against the yen were fresh reminders about the US currency's dim prospects on expectations the Fed will soon have to flood the financial system with more newly printed money, or quantitative easing.

"One thing that people underestimate is that the US will do everything in its power to reflate the economy. It's not just a question of QE2, but if required they will do QE3, QE4 etc," Pranay Gupta, chief investment officer for ING Investment Management Asia Pacific, said.

"Like it or not, loose monetary policy is here to stay and money flow coming out of the US and into Asia is here to stay," said Gupta, who oversees $85 billion in assets.

With the next Fed policy meeting and the next G20 summit still weeks away, the well-worn trade of selling dollars to buy emerging market stocks, commodities and longer-term bonds was still in play.

Singapore's monetary authority surprised traders by tightening policy, which it manages through a secret band in which its currency is allowed to trade. The news prompted the US dollar to fall broadly, pushing up the euro to an eight-month high around $1.4095.

"It is a pre-emptive move," Chua Hak Bin, an economist with Bank of America Merrill Lynch, said of the Singapore decision.

"Another Fed package would have brought interest rates even lower and driven more capital flows into Singapore."

The US dollar index, which measures the dollar's performance against six other major currencies, slid 0.7 percent to the lowest since December 2009.

The Australian dollar was at US$0.9963, up 0.7 percent on the day and within sight of parity, something not seen since 1982.

Australia's currency, which has benefited from having relatively high yields among G10 currencies, has risen 9.3 percent since September.

The falling US dollar lifted gold prices 0.7 percent to $1,380.45 an ounce, a record high, and copper traded on the London Metal Exchange up 1.5 percent to $8,487.00 a ton, its highest since July 2008.

Climbing commodity prices have been a boon for resource-related shares, and the materials sector gave the biggest lift to MSCI's index of Asia Pacific stocks outside Japan.

The index was up 1.5 percent to the highest since June 2008, having risen 14.5 percent since September, outpacing the 11 percent rise in the all-country world index.

Japan's Nikkei share average led gainers in Asia, up 2 percent. Resource stocks led the rise, although analysts said the yen's strength would limit the market's upside potential.

Gains in oil-related stocks helped to push up Hong Kong's Hang Seng index 1.1 percent to a 28-month intra-day high.

China Petroleum & Chemical Corp (Sinopec) stock rose 1.2 percent after analysts at Bank of America Merrill Lynch added the stock to its Asia Pacific Focus 1 portfolio, a list of its highest conviction buy-rated stocks.

Tuesday, November 16, 2010

Liquidity hits one-month low

HCMC – Trade on the southern stock market tumbled to a one-month low on Thursday although stock prices did improve slightly. The VN-Index inched up a mere 0.8 point, or 0.18%, against the previous session and ended the day at 449.52, but liquidity fell below VND1 trillion.

The market opened lower but made a quick recovery to hit a daily high of 450.85. It fell into the red once more after the second phase and then recovered a second time to close just into the black.

Investors bid for 70.5 million shares on the Hochiminh Stock Exchange, up 2.9% against the previous session, while the amount on offer shrank 15.4% to 56.6 million shares. Closing the day, the market’s total trading volume was 38 million shares worth VND989 billion, dropping by 1.5% and 3.3% from the day earlier respectively.

There were 112 stocks advancing on Thursday versus 90 others closing in the red, of which eight stocks went to the ceiling prices and four issues plunged to the floor prices.

Ocean Group Co. (OGC) remained the most actively traded stock, ending the day up 2.9% to VND35,000 with 3.2 million shares traded, followed by Eximbank (EIB), closing at the reference price of VND17,300 on the volume of over 950,000 shares.

Foreigner participation was much stronger, with 5.2 million shares worth VND192 billion acquired and 3.1 million shares worth VND123 billion offloaded. They accounted for 20.7% and 13.2% of the market’s buying and selling value respectively.

The Hanoi market recovered some ground on Thursday but turnover remained low at VND635 billion. The HNX-Index added 1.19 points, or 0.94%, from the previous session and ended the day at 128.4.

Some 124 stocks rose while 136 stocks declined, of which five stocks went to the ceiling prices while 13 stocks dropped to the floor prices. Foreigners were slight net sellers, accounting for 2.8% of the buying value and 2.9% of the selling value.

Fiachra Mac Cana, managing director of HCMC Securities Corp., said the markets endured another day of fairly lifeless trading with little movement and yet lower volumes.

The market did end the day slightly higher nut the level of interest continued to wane. Market breadth was higher though and foreign participation levels remain very high, he said.

“The central bank seems set to announce any amendments to Decree 13 sometime next week and given the short time between then and the October 1st deadline this would tend to support the consensus view that any changes at this late stage will be fairly minor. The markets will likely continue trade in the current narrow trading range before then. Medium to long-term investors can comfortably continue to buy,” Mac Cana added.

Au Viet Securities Co. said mind rallies of many stocks on Thursday were a positive sign for another rising session on Friday. “Buying power will be stronger when the VN-Index nears 455 points. We think that the correction phase is about to end and the market will improve on Saturday or next week,” the broker said.

Monday, November 8, 2010

Market drops below 450 points

Investors watch stock prices at Vincom Securities Co. The VN-Index fell 4.12 points, or 0.91%, from the previous session to close at 447.27 on Monday - Photo: Le Toan

HCMC – The local market opened the week down on Monday following a sharp decline late last week, with the VN-Index losing 4.12 more points, or 0.91%, from the previous session to close at 447.27.

Liquidity on the southern bourse also declined with 46.3 million shares worth VND1.1 trillion traded, decreasing by 12.6% and 16% against the previous day respectively. Investors bid for 79 million shares, almost on a par with the amount on offer at 79.6 million shares, the latter contracting by a quarter.

The market opened briefly higher before starting to slide and fell back to hit the daily low of 442.43 by the middle of the continuous matching phase. It then rebounded somewhat but still closed in the red.

The market saw 43 stocks advancing while 169 others losing grounds, of which six stocks closed at the ceiling prices and 48 others plunged to the floor prices.

Viet-Han Corp. (VHG) became the most actively traded stock but it dropped to the floor price of VND20,900 per share on the volume of 1.5 million shares, followed by Investment and Trading of Real Estate Co. (ITC), which also lost 4% against the previous day to VND23,900 with 1.4 million shares changing hands.

Foreigners were still strong net buyers, acquiring 3.5 million shares worth VND120 billion and offloading 1.4 million shares worth VND49 billion. They accounted for 10.7% and 4.4% of the market’s buying and selling value respectively.

Meanwhile, the Hanoi market tumbled again on Monday in much lower turnover of VND890 billion. The HNX-Index lost 2.93 points, or 2.23%, against the previous day and ended the day at 128.22.

Only 47 stocks increased while 253 stocks declined, including three stocks hitting the ceiling prices and 32 stocks dropping to the floor. Foreigners shifted to the buying side as well, accounting for 0.6% of the buying value and 0.32% of the selling value.

HCMC Securities Corp. in its comment on Monday said Decree 13 continued to dominate sentiment and investors were spooked on Monday by the rumor that the new regulations will be implemented without any delay and without adjustments.

“While the HNX-Index closed almost at its lowest level of the day, the VN-Index managed to stage a five-point rebound from its intraday low to the close, so there are still investors out there who are willing to take a longer term view and scoop up positions if prices fall too quickly. However, the situation remains fragile and sentiment can remain volatile in the immediate future,” it said.

“The rebound off the 442-point level on Tuesday could lead to slightly better sentiment in the very short term. But as long as the new banking regulations cause the volatility that we have seen over the past weeks, it will be hard to give any sort of indication for the direction of the index over the coming week,” the broker added.

Market drops below 450 points

Investors watch stock prices at Vincom Securities Co. The VN-Index fell 4.12 points, or 0.91%, from the previous session to close at 447.27 on Monday - Photo: Le Toan

HCMC – The local market opened the week down on Monday following a sharp decline late last week, with the VN-Index losing 4.12 more points, or 0.91%, from the previous session to close at 447.27.

The market saw 43 stocks advancing while 169 others losing grounds, of which six stocks closed at the ceiling prices and 48 others plunged to the floor prices.

Meanwhile, the Hanoi market tumbled again on Monday in much lower turnover of VND890 billion. The HNX-Index lost 2.93 points, or 2.23%, against the previous day and ended the day at 128.22.

Saturday, November 6, 2010

Asia stocks keep global rally alive; yen rises

Photo: Reuters

HONG KONG - Asian stocks edged up while the yen rose to a 15-year high on Tuesday ahead of a decisive vote in Japan, leaving unclear whether a rally that lifted global equities to the highest in four months can stay alive.

The yen has for the past few years been a gauge of investors' distaste for risk-taking, rising when the need for stability is high.

Investors though have had mixed signals in September about whether it is the right time to shift out of havens and buy back riskier, higher-yielding assets.

Resilient economic growth out of China and relief that new banking regulations will not unleash a rush to raise equity have gently turned the attention of investors away from uncertainty about the US recovery.

August US retail sales due later could be a reminder though of how much the economy is slowing.

"Although better data in the US and China and the agreement in Basel on new regulations have boosted risk appetite, the moves are already beginning to look exhausted," Mitul Kotecha, global head of foreign exchange strategy at Credit Agricole CIB, said in a note.

"It would be easy to jump on the bandwagon, but after the sharp gains registered over recent days we would suggest taking a cautious stance about jumping into risk trades at current levels."

Japan's ruling party was holding a leadership election on Tuesday that will determine who is Japan's prime minister and could have a big impact on how Tokyo deals with persistent yen strength and deflation.

The US dollar was down 0.4 percent to 83.34 yen after earlier falling as low as 83.23 yen in busy trade.

Too close to call

The race between Prime Minister Naoto Kan and party heavyweight Ichiro Ozawa was too close to call, Japanese media surveys showed, ahead of a party conference due to start.

Analysts generally agree an Ozawa victory could cause the yen to weaken, since he is more open to government intervention to stop the currency's 11 percent climb this year.

The US dollar index, a measure against six other major currencies, fell 0.2 percent to a one-month low after weakening by the most in two months on Monday, as dealers scooped up yen and Swiss francs.

Japan's Nikkei share average led Asia's declining markets, falling 0.2 percent. The strong yen has been a lead weight on Japanese stocks, causing them to underperform other advanced markets.

"While opinion polls have favored Kan, the stock market overwhelmingly would want to see Ozawa win because he is seen to be a more aggressive leader, including his view on currencies," said Kenichi Hirano, operating officer at Tachibana Securities in Tokyo.

The Nikkei has not risen above its 200-day moving average since early May. The US S&P 500 index on the other hand has breached the key long-term indicator three times since May, including overnight. A third failure to stay above the 200-day moving average could trigger a bout of profit-taking.

The MSCI index of Asia Pacific stocks outside Japan was up 0.3 percent, having fallen for only two days so far in September. The raw materials sector provided the biggest lift, while sectors associated with safety from volatility underperformed, a hopeful sign for equity bulls.

The index is trading at 11.7 times expected earnings a year from now, still way below the five-year average of 13.2 times, suggesting there are still more bargains out there, Thomson Reuters I/B/E/S data showed.

The all-country world stocks index rose for a fifth day to the highest since May 5.

While equity market traders tried to keep a rally going, bond markets could hold a clue on investor sentiment on risk taking.

A precipitous decline in the yield of the 10-year US Treasury note since April paused in September, while investors reloaded on cheap equities and higher-yielding credit. The resumption of declining US yields could be an additional weight on the dollar and a sign of interest in risk taking.

The US 10-year yield was at 2.74 percent, roughly unchanged from where it was late Monday in New York.

Japanese 10-year government bond yields edged up 2 basis points on the day to 1.17 percent, giving way to equity strength.

Oil was steady near a one-month high with the shutdown of the biggest Canada-US pipeline entering a fifth day. US crude for October was trading at $77.25, having earlier touched an intra-day peak at 78.04, the highest since Aug. 11.

Tuesday, October 5, 2010

Asia stocks rise as US data soothes fears

Photo: Reuters

TOKYO - Asian stocks rose to a two-week high, with Japan's Nikkei briefly rising more than 2 percent, as strong US manufacturing data further soothed worries about the global economy.

The dollar and the yen began the day on the defensive, while commodities gained, helping make materials shares some of the strongest performers across the region as gold steadied after a two-month top hit on Wednesday.

The Institute for Supply Management said its index of US factory activity rose to 56.3 in August from 55.5 in July, much higher than forecast by economists.

Coming on the heels of strong Chinese manufacturing data and stronger-than-expected growth in Australia, the numbers eased investor fears about the pace of global economic recovery and helped Wall Street to its best day in eight weeks.

But gains in Asian stocks, which were also boosted by gains in tech shares, appeared capped by wariness about whether the global economy is truly on the path to recovery, as well as concern about closely watched US nonfarm payrolls data on Friday.

"It's too early to say worries about a double-dip recession in the economy have been wiped away just because China's PMI, Australia's GDP and US data weren't bad," said Masahiko Sato, an executive director at Nomura Securities' equity marketing department.

"But stocks may become more resilient to poor economic indicators going forward and gain further if money that had shifted to bonds on extreme concern over the economy comes back to equities, early signs of which have likely appeared in US, Germany and U.K. bonds after yesterday's data."

The MSCI index of Asia Pacific stocks outside Japan rose 0.8 percent to its highest level since mid-August.

Japan's benchmark Nikkei rose more than 2 percent at one point, moving further away from a 16-month low hit on Wednesday, helped by what some market players said was buying by domestic institutional investors at lows and buying of futures by foreign players.

But the Nikkei pared gains to 1.2 percent by midday. It lost 7.5 percent in August and is down roughly 14 percent on the year.

Seoul shares rose 0.3 percent, boosted by tech stocks, with market players saying foreign investors, cheered by the rise on Wall Street, could turn strong buyers.

Australian stocks rose 0.8 percent to a three-week high, with miners such as Rio Tinto gaining after copper prices rose to a four-month high.

Steady dollar

The dollar index, a gauge of the greenback's performance against a basket of six major currencies, was steady on the day at 82.528 after falling 0.9 percent on Wednesday, marking its biggest one-day fall in six weeks.

The dollar edged down 0.2 percent to 84.27 yen but still stayed above a 15-year low of 83.58 yen hit last week.

Through the ISM data boosted higher-yielding currencies such as the Australian dollar, investors have now turned hesitant about taking fresh positions ahead of the European Central Bank's policy meeting later in the day and Friday's closely watched monthly US job report, a trader said.

Spot gold edged up to $1,246.70 an ounce, after hitting $1,254.65 on Wednesday, its highest since June 28.

Oil held onto most of the previous session's gain of 2.8 percent after the strong manufacturing data in top consumers the US and China raised hopes record oil inventories will draw down.

US crude for October delivery was steady at $73.91 a barrel after a jump of nearly $2 on Wednesday.

Friday, October 1, 2010

Asia stocks rise on China

Photo: Reuters

SINGAPORE - Asian stocks rose on Wednesday as investors cheered a manufacturing rebound in China and rosier-than-expected Australian growth, which halted the yen's advance towards a 15-year peak against the dollar.

Asian stocks shrugged off a flat lead from Wall Street, reflecting belief that Asia's economic recovery could hold up relatively well compared to the United States, which faces the possibility of a double-dip recession.

Leading European stocks opened 0.4 percent higher, while S&P 500 futures were flat.

China's manufacturing economy regained some momentum in August, while Australia's economy grew at the fastest pace in three years last quarter as households spent far more than expected while exports enjoyed an Asian-driven boom.

"The market is still concerned about the global recovery momentum, but based on fundamentals, some funds will flock from developed countries to Asia," said Daniel Chan, chief economist and wealth management strategist BWC Capital Markets in Hong Kong.

The MSCI index of Asia Pacific stocks outside Japan rose 1.5 percent, led by commodity-related shares due to optimism about Chinese.

But the MSCI Asia index is still down about 2.5 percent so far this year, compared to a 6.6 drop on the MSCI world-wide index, underscoring Asia's economic resilience.

Analysts expect increased volatility in Asian stock and bond markets as markets brace for a slowdown in the world economy.

Japan's Nikkei average rose 1.2 percent after briefly hitting a 16-month low, getting a boost from the Chinese data while technology shares crawled higher in reaction to a sharp fall the day before.

Australian stocks jumped just over 2 percent, the sharpest daily rise since early July, as investors applauded Australia's outperformance against sluggish global economies.

Australia and New Zealand Banking Group led in a rally in local bank shares, powering 2.4 percent higher.

South Korean stocks gained 1.3 percent, propelled by auto and retail counters including Kia Motors and Lotte Shopping, but key technology shares continued to fall amid persisting concern over global economic recovery.

"The market is being helped by gains in defensive, domestic consumption issues as investors seek safer bets," said Lee Sun-yeb, a market analyst at Shinhan Investment Securities.

U.S. Treasury yields rebounded slightly after the benchmark 10-year yield recorded its largest monthly drop in August since late 2008, when markets were reeling from the Lehman Brothers collapse.

Yen off 15-year high

The yen fell as upbeat Chinese and Australian data improved investors' appetite for risk. It extended losses after Japanese ruling party powerbroker Ichiro Ozawa, challenging Prime Minister Naoto Kan in a party leadership vote, said he would implement steps including intervention if the yen rose sharply.

The Australian dollar jumped 1 percent to 75.85 yen and the dollar edged up 0.3 percent to 84.40 yen.

Japanese government bonds fell as investors braced for a debt sale, and the yield curve resumed steepening as superlongs sagged on the underlying prospect of potential political change watering down the government's stance on fiscal austerity.

The 10-year yield was up 5 basis points at 1.010 percent while the 20-year yield climbed 7.5 basis points to 1.735 percent, heading back towards a seven-week high of 1.835 percent hit on Monday.

Gold prices hit a fresh one-month high at $1,250.55 an ounce, while crude gained 36 cents to $72.28 a barrel after tumbling 3.7 percent the previous day on signs U.S. stockpiles rose further last week and prospects of bad weather to suppress demand at the end of the driving season.

Asia stocks rise on China