Ho Chi Minh Stock Exchange’s (HoSE) VN-Index closed the first trading
week of March at 513.39 points on March 5, with 45.5 million shares
worth $105 million changing hands, up 100 per cent against trading days
before Tet holiday.
Duong Hong Ha, chief analyst with Tri Viet
Investment & Consultancy Corporation (TVIC), said investors in the
recent days had witnessed increased market liquidity with more than 40
million shares traded on the HoSE a day on the average or $79 million,
indicating that money flows were returning to equities.
“Normally,
sudden high market liquidity is a signal of a next sharp market rally.
We hope that from now, market liquidity of over $79 million trading will
be normal,” said Ha. Ha said money inflows to equities came mostly from
domestic institutional and retail investors. “Money flows are shifting
quickly and strongly between sectors, mainly among stocks with low and
medium market prices, indicating that speculators have been in market
but are not driving forces,” said Ha.
Tong Minh Tuan, deputy
head of BIDV Securities Company’s (BSC) Analysis Department, said
improved market liquidity proved that money was returning to equities, a
positive signal for short-term market outlook.
“Long-term
investors, however, should pay attention to market fundamentals,
corporate earnings to decide next moves,” said Tuan.
Pham
Kinh Luan, Kenanga Vietnam Securities’ chief analyst and investment
director, said that Vietnam’s macroeconomic conditions had stabilised
following the recent timely monetary policy reactions, but the next
policy moves were unclear.
Luan said bank liquidity had improved
after the central bank pumped trillions of dong into the interbank
market, allowing negotiable interest rates for medium and long-term
loans. The country’s stock markets are also showing bullish signs again.
Luan
said inflation was now a top concern, after credit growth had soared by
nearly 38 per cent in 2009. He said if inflation continued to go up at
the same pace as the first two months of 2010, further tightening
policies were likely.
The consumer price index (CPI) in February
soared 1.96 per cent on month, bringing the CPI for the first two
months to 3.35 per cent, or nearly a half of the 7 per cent planned for
2010, according to the General Statistics Office (GSO).
“Equities
investors should be cautious until March inflation data is released,”
Luan told VIR on the sidelines of a Kenanga Vietnam Securities March
Market Talk last week. Luan did not predict how the base rate would be
hiked if CPI soared in March. “Cautious aptitude does not mean that
investors will not trade stocks, but they should be carefully looking at
stocks with strong fundamentals,” said Luan.
A top Ministry of
Finance senior analyst said keeping inflation at 7 per cent for 2010 was
challenging, as recent petrol and power price hikes would cause more
headaches for commodity prices this month.
“We should wait until the
March inflation number is released. There could be possible changes in
money, investments and government spending,” said the senior official.
Le
Duc Thuy, former State Bank governor and now chairman of the National
Committee for Financial Supervision, said that “physical inflation” was
more serious than “true inflation”, as all macroeconomic data was still
positive. Thuy said that the CPI had increased by 3.35 per cent for the
first two months, but this was not a big concern, as it accommodated
the country’s long Tet holiday.
“We shouldn’t panic because
inflation is still under control and two digit inflation is unlikely to
happen this year,” Thuy said.