June 2: Vietnam stocks surge second day on regulation changes

Vietnam’s stocks continued to soar for a second day, extending gain streak to 6th day in a row as investors rushed to buy shares on news that margin trading, intraday trading will be legal from August 1.

The benchmark VN Index surged 14.9 points or 3.429% to 450.59, biggest one day gain since December 13 last year. The index gained 16.62% in the current 6 straight gaining days, the longest run since Jan 21. In May, the index lost 12.2% on margin call pressure.

Volume improved a bit with 34.4 million shares traded for VND681.32 billion, including 2.3 million shares worth VND57.69 billion changed hands in the put-through deals compared with 33.9 million shares traded for VND580.86 billion traded Wednesday.

Though the liquidity was steady today, it has not yet been back to the high level and trading turnover was far from VND1 trillion a day. Traders expected rising momentum to last longer in very short term if current liquidity is steady.

The market got support from the news that the Ministry of Finance has issued a circular which makes margin trade, multiple securities trading account holding and intra-day trade legal from August 1, Nguyen Son, head of market development department of the State Securities Commission confirmed the news with the news service NDHMoney today.

Headlines showed that the State Bank of Vietnam adjusted down dollar deposit interest rate caps to 2% from 3% for individuals and 0.5% from 1% for institutions (except for credit institutions), said the central bank in Circular 14 which came into effect today June 2.

On June 1, the SBV decided to increase the reserve requirement in USD from 6% to 7% of total
deposits, following an adjustment from 4% to 6% it made in April.
Vietnam Shipbuilding Industry Group, the state-owned company with more than $4 billion of debt, asked holders of a local-currency bond it defaulted on in April to write off as much as 90%of the money owed, Bloomberg quoted a bondholder who met company officials last week.

Petrolimex, Vietnam’s top oil importer and distributor, has received government approval to sell 5% of its shares in an initial public offer, The state would reduce its holding in the company to 75% at a later stage, Deputy Prime Minister Nguyen Sinh Hung said in a directive signed on Tuesday.

In related news, interbank midpoint dollar stayed unchanged at record low of VND20,638 but banks raised dollar bids by VND30-50/dollar and dollar offer by VND10-20/dollar. Local gold rose VND80,000, breaking up VND37.9 million a tael briefly this morning before easing back to VND37.88 million a tael in the afternoon.

Back to the market, VN Index opened in the green with 2.45 million shares traded. The trading pattern was repeated for a third day, buying interests were increasing as market progressed, sending the VN Index to close at the high of the day. Trading was a bit more active in the order matching session.

Market breadth was broadly positive, gainers outweighed losers by 231-30, 28 stocks unchanged. As many as 145 stocks hit upper limit while 5 others fell to the floor.

STB regained its most active stock with 1.9 million shares traded, closing up 1.7% to VND12,000.

SSI was the second most active stock with 1.6 million shares traded, closing up 4.7% to VND18,000.

REE was in the third place with 1.4 million shares traded, closing up 4.4% to VND11,800.

ASM and CTG followed in the list with 1.3 million shares traded each.

On the Hanoi Stock Exchange, the HNX continued to soar 2.32 points or 3.23% to close at 74.05.

Trading volume was steady with 28.2 million shares traded for VND300.41 billion. Gainers outnumbered losers by 284-46 and 16 stocks unchanged.

KLS was the most active stock with 1.9 million shares traded, closing up 5.9% to VND9,000 on average.

VND ranked second in the list with 1.7 million shares traded, closing up 6.5% to VND11,400 on average.

WSS was in the third place with 1.3 million shares traded, closing up 6.4% to VND5,000 on average.

On this smaller cap bourse, the average trading price is taken as the midpoint price of the following trading session where share prices are allowed to move 7% either side. – Stoxplus.com

Tags: vietnam stock, Vietnam stock market, VNindex