Vietnam's stock market went up for the 10th straight trading session Tuesday, but its upward trend is considered short-lived by some securities officials and investors.
The country's stock market index, VN-Index, measurement of 156 companies and four investment funds on the Ho Chi Minh Stock Exchange, climbed for the 10th consecutive session to close at 511.53 on Tuesday, while HASTC-Index, the index of Vietnam's Hanoi Securities Trading Center, where unlisted stocks of firms are traded, rose for the 8th straight trading session to 159.51 points.
"The liquidity of the stock market has improved recently," Nguyen Son, director of the Market Development Department under Vietnam's State Securities Commission said, noting that the country's macroeconomic factors have shown positive signs, the global stock market has recovered, and prices of crude oil and gold in the world market and those of some essential goods in the domestic market have dropped.
Vietnam's inflation growth is slowing down, and its trade deficit is lessening, while a number of listed companies reported relatively satisfactory business results in first months of this year, he said.
Vietnam's consumer price index (CPI) increased only 1.13 percent in July over June, the lowest level since early this year. June's CPI rose 2.14 percent over the previous month, while May's CPI surged 3.91 percent month-on-month.
The Vietnamese government has instructed economic sectors to increase exports to keep the country's trade deficit below 20 billion U.S. dollars and gain export growth of 28 percent in 2008.
Now, investment channels like banking, gold, foreign currency and realty trading are becoming less attractive due to lower deposit interest rates, fluctuating gold and dollar prices, and fewer real estate transactions, which has provoked some investors to pour money into the local bourse, said Bui Tri Dung, customer of Tan Viet Securities Company.
"However, VN-Index is unlikely to keep on increasing. The index has surged by 18.8 percent over the past 10 trading sessions with huge volumes of stocks changing hands, so many investors are selling stocks to book profits," the 30-year-old investor said.
On the Ho Chi Minh Stock Exchange, 18,829,530 shares and investment fund certificates worth 786.1 billion Vietnamese dong (VND) (47.1 million dollars) were traded on Monday, and 34,276,630 securities totaling 1,338.6 billion VND (nearly 80.2 million dollars) on Tuesday, while an average of only 17.9 million stocks valued at 627 billion VND (37.5 million dollars) changed hands in a trading session last week.
Macroeconomic situations in general and enterprises in particular are forecast to still encounter many difficulties in the remaining months of this year, the investor said, predicting that "VN-Index is much likely to stand at around 550 points from now to the year-end."
According to the Analysis Department of the Eurocapital Securities Joint Stock Company, the local bourse will have more positive signs in the coming time, though demand for stocks will not be too large. "We forecast that VN-Index will vary from 500 to550 points in the third quarter of this year," the department said.
The Analysis Department of the Viet Dragon Securities Corporation said: "When there is high inflation in the economy, investors tend to invest in essential sectors of the economy such as natural resources, electricity, fertilizers, and essential consumer goods. Furthermore, stocks of medical group can also grow well. The group of real estate stocks may recover at the end of 2008 when the most difficult time for real estate loans has passed."
The stock market faced the downward trend from late 2007 to mid-June 2008, with VN-Index falling from over 900 points to 366.02 points on June 20. Meanwhile, HASTC-Index dipped from more than 320 points to 107.76 points on June 10.
Vietnam currently has 156 kinds of listed shares, 391 kinds of listed bonds, mostly government bonds, and four listed investment funds, according to the latest statistics from the State Securities Commission.
Source:Xinhua
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