The central bank’s rate cuts and relaxed stance on real estate lending buoyed investor sentiment on Thursday as the local market made strong gains for a sixth consecutive session, with the VN Index up 6.52 points, or 1.42 percent, from the day earlier to 465.26.
Liquidity on the southern bourse climbed to the highest level since mid-March with 106 million shares worth over VND1.7 trillion changing hands, rising by 6.6 percent and 13.3 percent against the previous day respectively.
The market opened higher and quickly went on a run that sent the VN Index soaring to the daily high of 468.86 before dropping back slightly at the end of the morning session. Afternoon trading was more subdued as the market fluctuated in a narrow range before closing in positive territory.
Gainers far outnumbered losers by 185 to 62 while 61 others closed at the reference prices. Blue-chips rose across the board, led by high beta stocks, and real estate stocks stole the limelight as the central bank loosened its stance on bank lending to the sector.
Military Bank (MBB) led the market in terms of liquidity, adding 3.1 percent from the session earlier to VND15,800 per share with 10.2 million shares traded. Sacombank Securities Co. (SBS) was the second most actively traded stock but it plunged to the floor price of VND6,400 with 4.5 million shares changing hands.
HCM City Securities Corp. said high beta stocks are being boosted at the macro level with the central bank’s interest rate reductions and an improvement in the short-term inflationary environment.
At a micro level, this additional development is propping up investor sentiment. The putting of a lower cap on real estate prices has an influence on the banking sector. Hence, this news is a shot in the arm for the market, the broker said.
“Most real estate companies went up to the ceiling today and further gains can be expected in the days to come. Related sectors such as steel and cement will benefit as well. In the real estate sector itself, we like DIG, NTL and BCI. Investors that bet on risky stocks can pick up HAG. In the steel sector we go for HPG and POM,” it added.
The Hanoi market also jumped with turnover rising to over VND1.1 trillion. The HNX-Index gained 1.03 points, or 1.33 percent, against the previous session and ended the day at 78.54. The session saw 191 stocks moving higher and 98 others posting losses.