Strong involvement of individual investors and participation of new foreign fund would help offset the net selling trend of foreign investors.
Vietnam’s benchmark Vn-Index could reach its all-time high of 1,300 points in April, with new foreign cash flows and domestic individuals as key market drivers.
The new capital inflow would help offset the net selling trend of foreign investors, said the Viet Dragon Securities Company (VDSC) in its monthly report.
According to the VDSC, the stock market in April will maintain their upward movement from March, with the Vn-Index ending the month with a gain of 1.23% month-on-month to 1,191.44.
“Capital inflow pumped by foreign funds and domestic investors, along with positive business performance outlook in banking stocks are two main catalysts. However, inherent risk would be the unsolved issue of overloaded trading system in short-term,” stated the report.
In the past year, foreign investors maintained net selling position with large value of VND29.3 trillion (US$1.27 billion).
“However, we did not recognize it as considerable risk thanks to the strong involvement of individual investors and participation of new foreign fund,” stated the VDSC.
On March, the new ETFs from Taiwan – Fubon FTSE Vietnam ETF by Fubon Financial Holdings was established. A few days later, Fubon FTSE Vietnam ETF conducted an IPO and raised TWD5.28 billion (US$185.3 million), while planning to mobilize further TWD10 billion (US$350.8 million) to invest in Vietnam stocks.
As this fund uses the base of FTSE Vietnam 30 Index, it is expected to supplement new inflows to VN30 group and possibly uplift the market, said the VDSC.
Banks to serve as main driving force supporting the market in April
VDSC’s report predicted the growth of bank’s profit-before-tax (PBT) to be 26% in 2021. The performance of the banking sector in the first quarter was even more optimistic with the three-digit growth of 115% in PBT thanks to the contribution of non-interest income, and negative growth in provision costs.
“Therefore, VN-Index would be likely to go further with the force from banking stocks,“ it added.
In April, one significant event will be the review of ETFs benchmarked VN30, VN Finlead and VN Diamond. In this restructuring period, banking stocks including ACB, EIB, MSB and VIB are expected to benefit from VN Diamond ETF Fund’s cash flow when they meet the conditions to be added to the index basket.
|Local investors at a securities center in Hanoi. Photo: Viet Linh|
Picky approach is prioritized when VN-Index surpassed 1,200 points
After the end of annual general meeting (AGM) season, market would fall into “information scarcity” time. Therefore, the driving force of the market in the end of April and May may not be the same and the market could be subject to correction, especially when the issue of trading system has not been fully solved.
The report urged investors to adopt a bottom-up approach and focus on stocks having “better than expected result” in 2021.
At the close today [April 6], the Vn-Index rose by 0.32% or 3.91 points to 1,239.96, with foreign investors being net buyers of VND21 billion (US$910,000) on the market.
VN-Index drops with trade value surges
Vietnam’s benchmark VN-Index fell 0.7 percent to 1,241.81 points Friday with trading value hitting a 10-session high.
The index stayed in the red throughout the day, dipping to around 1,231 points in the early afternoon before climbing and ending with a near 9-point fall. This is its biggest plunge in the last seven sessions.
Trading value on the Ho Chi Minh Stock Exchange (HoSE), on which the index is based, rose 10 percent to VND22.4 trillion ($975 million), the highest of the past 10 sessions.
The VN30 basket, comprising the largest 30 capped stocks, saw 22 tickers in the red, with VCB of state-owned lender Vietcombank and VNM of dairy giant Vinamilk the biggest contributors to the drop of VN-Index.
VCB fell 2.3 percent. The ticker has been going sideways around the VND100,000 level since February after climbing to a new historic peak of VND107,000 in early January.
VNM dropped 2.9 percent to a nine-month low. The ticker continued its downward trend that began in January, having lost 25 percent in four months.
VHM of real estate giant Vinhomes fell 1.6 percent to its lowest level since March 30.
BID of state-owned lender BIDV lost 1.5 percent, having fallen nearly 17 percent since its mid-January peak.
On the winning side, HPG of steelmaker Hoa Phat Group rose 2.4 percent, and CTG of state-owned lender VietinBank gained, 2.1 percent. They were the top tickers pushing up the VN-Index this session.
Foreign investors were net sellers for the fifth session in a row to the tune of VND330 billion, with the strongest pressure on VPB of private lender VPBank and HPG.
The HNX-Index for stocks on the Hanoi Stock Exchange, home to mid and small caps, fell 0.44 percent while the UPCoM-Index for the Unlisted Public Companies Market dropped 0.41 percent.
Inflation fears begin as economy recovers
HCM CITY — The cost of raw materials used in many industries have risen sharply in the last few months, putting pressure on the prices of many essential goods.
Instant noodles, seasoning, cooking oil, and others have seen prices increase by 7 -10 per cent since the end of 2020.
The price of meat and poultry has increased by 10 -15 per cent.
Nguyễn Thị Trâm, a pig farmer in Đồng Nai Province’s Thống Nhất District, said the price of a 25kg bag of bran has increased from VNĐ245,000 in October last year to VNĐ295,000 now.
Prices of raw materials used to make feed, such as corn, rice bran and fish flour, are also rising.
But farmers cannot hike poultry price since they have to compete with cheap imported products.
Globally, the prices of raw materials and fuels are expected to rise again as COVID is gradually controlled, vaccination is done on a large scale and production and trade recover.
Dr Nguyễn Ngọc Tuyến of the Academy of Finance predicted the consumer price index (CPI) to rise more than last year but remain below 4 per cent for the year, the target set by the National Assembly.
Nguyễn Anh Tuấn, director of the Ministry of Finance’s price management department, warned there would be pressure on prices this year because of the rise in fuel prices.
But a spokesperson for a large supermarket chain in HCM City said the price of each item would be carefully considered before any increase is made, and essential goods are not expected to be affected much in general. —
FTA providing impetus for Việt Nam – Chile trade
HÀ NỘI — Despite there being no commitments on services and investment in the Việt Nam – Chile Free Trade Agreement (FTA), the pact has boosted trade and economic ties between the two countries.
The view was shared at the fourth meeting of the Việt Nam – Chile free trade council, which was held online and chaired by Deputy Minister of Industry and Trade (MoIT) Đỗ Thắng Hải and Vice Minister of Trade at Chile’s Ministry of Foreign Affairs, Rodrigo Yanez on Thursday.
According to the Ministry of Industry and Trade’s European – American Market Department, the two countries have enjoyed robust relations over the years.
Despite the difficulties posed by the COVID-19 pandemic, two-way trade in 2020 topped US$1.28 billion, up 4.43 per cent year-on-year and 2.5-fold higher than the figure recorded in 2013, prior to the FTA coming into effect.
Chile is one of Việt Nam’s four largest trade partners in Latin America, while Việt Nam is the largest trade partner of Chile in ASEAN.
Goods trade in the first four months of this year rose 15.3 per cent year-on-year to $401.1 million, with Việt Nam’s exports standing at $321.3 million, up 11.8 per cent.
Both sides recognised the efforts made to implement the FTA.
The subcommittee for trade in goods discussed matters regarding tariffs and origin of goods and considered the application of electronic certificates of origin to simplify procedures for exporters in both countries.
Meanwhile, the subcommittee for hygiene and phytosanitation worked on import procedures for several agricultural products.
Việt Nam has begun risk analysis on Chilean kiwi fruit while the South American country said it will begin analyses of Vietnamese rambutan in July.
Both agreed to step up measures to help Vietnamese and Chilean businesses capitalise on the Việt Nam – Chile FTA as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after it is ratified by Chile. —
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