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Global plunge stalls local market   2010-05-10 - Viet Nam News

Although the nation’s stock markets registered net gains in both trading value and volume last week, steep declines on the US and global markets stalled any advance by the local indices.

On the HCM City Stock Exchange, the VN-Index froze in place, closing Friday at 542.03 points, off just 0.06 per cent from the previous the week’s close. The average daily value of trades grew by 30.1 per cent to VND3.1 trillion (US$164 million), while average daily volume rose by 43.2 per cent to over 88 million shares.

On the Ha Noi Stock Exchange, the HNX-Index performed a little better, adding 2.6 per cent on the week to end Friday’s session at 184.38 points. The average daily trading value on the northern bourse also soared by nearly 32.9 per cent to about VND2.2 trillion ($116.4 million) on an average volume of nearly 61.5 million shares, an increase of 24.1 per cent over the previous week’s average volume.

The shocking decline of the US market on Thursday, along with a corollary slump on other regional markets, produced a stir among local investors underpinning Friday’s trades, said FPT Securities Co analyst Tran Quang Vinh.

"The US market had its worst week of trades in a year, affecting local investor psychology and causing national exchanges to suffer a hard fall on Friday," Vinh said, suggesting the market would have had a successful week without the global impact.

However, 550 points was also a strong resistance mark at which profit-taking pressures became heavy, he added, contributing to the skyrocketing trading volumes and values last week.

Blue chips had a sluggish week, losing value in all declining sessions and posting only tiny gains on rising days, said Vincom Securities Co analysts in their weekly report.

Hot small caps like Viet Nam Mechanisation Electrification & Construction Co (MCG), Ha Noi Investment General Corporation (SHN), Nari Hamico Minerals Joint Stock Co (KSS) and Dien Quang Co (DQC) continued to sustain the market, they wrote.

"First-quarter business results will no longer boost the market this week, and the liquidity of commercial banks will have an influence on market trends," wrote analysts at HCM City Securities Co.

But a number of securities companies were predicting that the market would continue to rise this week in the context of a favourable economic climate, although investor confidence could be affected by additional declines on global markets.

Vinh warned investors to monitor the developments on global markets prior to increasing their holdings and recommended they sell "hot shares" to realise profits amid the unclear market trends.

Foreign investors continue to have faith in the Vietnamese stock market, however, as Vincom Securities Co data show that foreign investors concluded last week as net buyers on the HCM City bourse of shares worth over VND281 billion ($14.9 million). On the Ha Noi market, however, they were net sellers by a net of VND25.7 billion ($1.4 million).

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