Feb 9: VN Index extends gain but selling pressure rises

Vietnamese stocks continued to post gain supported by heavy-weighed blue chips but broader market fell as profit taking pressure rose when the benchmark VN Index hit 7 months high.

The benchmark VN Index gained 1.9 points or 0.36% to close at 522.59. Volume rose to 31.77 million shares traded for VND857 billion compared to 24.86 million shares traded for VND707.02 billion on the first trading session of the Year of Cat.

The rising volume indicated the selling pressure rather than buying interest as local investors booked profit after 4-day gaining run with a rally of 4.26% in the past 4 sessions.

Hot blue chips BVH, CTG, PVF, VCB posted strong gains from the early trade that inspired the good mood into other stocks. DPM, NTL, HAG, DQC, PVD, VPL were among other which hit the ceiling prices, up 5%.

In local news, the state-run Economic Times quoted Planning and Investment Minister Vo Hong Phuc as saying that “Vietnam’s foreign exchange reserves dropped to more than $10 billion in 2010” from $16 billion in late 2009, adding that Vietnam needed to work harder to achieve socio-economic targets for the coming years, especially for 2011 as some headwinds are foreseen, even more difficult than in 2010”.

On the other side, local media also reported optimism from fund managers including Phan Anh, CEO of MBCapital’s expectation of 20% return in 2011, Dominic Scriven, CEO of Dragon Capital’s forecast of 20-25% corporate earnings growth rate and Lois Nguyen, CEO opf Saigon Asset Management expectation of Vietnam to be in the list of top fastest recovery stock markets in the world.

Vu Bang, chairman of State Securities Commission also said that the local stock market prospect is brighter as the obstacles and outstanding issues in 2010 are seen and to be solved. He promised to tighten control and punishment on regulation violation and expected FPI continued to rise this year.

Meanwhile, Tran Xuan Ha, Deputy Finance Minister, said at the opening session of the Year of Cat that local stock market will develop strongly this year with support from more stable macro economy and that Vietnam will adjust many stock regulations this year to support its development.

In related news, local gold prices rose almost VND100,000 to top VND36 million/tael early this morning before easing back to hold shy of VND36 million a tael today. Dollar prices fell to VND21,300 this morning.

Analysts say Vietnam need to tackle inflation to ease pressure on exchange rates and help cool down interest rates. The improvement is expected to be seen from late first quarter this year and stock market is expected to perform strongly in the second half.

Technical analysts say VN Index will met strong resistance at 530-535, the meeting of many technical resistances including Fibonacci 261,8% and Fibonacci 50,0% and other indicators MACD, RSI, MFI started to signal “over-bought”.

The market opened in the green with 1.62 million shares traded for VN55.02 billion. However, the early upbeat lost steam when selling pressure rose. The market pared gain and close at the low of the day despite heavy-weighed blue chips continuing to outperform.

Market breath turned negative, losers outweighed gainers by a ratio of 154 to 65 and 66 stocks unchanged. As many as 6 stocks closed up 5% upper limit while 16 others lost 5% limit.

CTG was the most active stock on the bourse with 1.88 million shares traded, closing up 4.71% to VND26,700.

REE ranked second in the list with 1.8 million shares traded, closing down 0.6% to VND17,600.

SSI was in the third place with 1.6 million shares traded, closing flat at VND29,900.

ITA and VCB also followed in the list with 1.2 million shares and 1 million shares respectively.

On the Hanoi Stock Exchange, the HNX posted a gain of 0.73 point or 0.67% to close at 108.39. Volume and value rose to 26.92 million shares traded for VND524.24 billion compared with 9.995 million shares traded for VND180.95 billion yesterday.

The market recorded 148 losers, 123 gainers and 102 unchanged stocks. As many as 20 stocks closed at upper limits while 20 others closed at the lower limits, the trading band on this bourse is 7% both sides.

VND was the most active stock on the bourse with 2.3 million shares traded, closing up 6.1% to VND21,000.

PVX ranked second in the list with 2.2 million shares traded, closing up 1.92% at VND21,200.

KLS was in the third place with 2.1 million shares traded, closing up 2.7% to VND15,500. – Stoxplus.com

Tags: vietnam stock, Vietnam stock market, Vietnam stock news