Stock markets perform well in 2013 as VN Index up 22.2 pct and HNX 18.9 pc

15-Jan-2014 Intellasia | Sai Gon Giai Phong | 6:00 AM Print This Post

According to State Securities Commission (SSC), in 2013, VN Index reached 504.63 points, up 22.2 percent and HNX-Index reached 67.84 points, up 18.9 percent. Economic expert voted this growth as one of the most outstanding economic events of 2013. The market capitalisation level increased nearly 200 trillion dong compared to 2012, reaching 964 trillion dong (equivalent to 31 percent of GDP).

The average transaction scale of each session reached 2.578 trillion dong, up 31 percent compared to 2012, mainly due to transaction of government – backed bond. Specifically, average transaction volume of G-bond reached 1.257 trillion dong per session (up 90 percent compared to 2012) and average transaction volume of shares and fund certificates reached 1.322 trillion dong per session (up 1.5 percent).

According to a leader of the SSC, strong recovery of 2013 stock market became outstanding because the market was forecasted to witness capital withdrawal of foreign investors in 2013. In fact, in 2013, total circulated foreign capital flow increased 54 percent and list value was $3.8 billion higher than the end of 2012. Account volume of investors reached about 1.27 million. Of which, account volume of foreign investors increased 55 percent.

There were no scandals in 2013, which is one of support factors for the market. Besides, stock market received positive supports from macroeconomic policies such as VND30 trillion housing support package and many solutions of bad debt settlement from the Vietnam Asset Management Company. In the second half of 2013, other investment channels were less attractive such as decrease in deposit interest rates, strong fluctuation of gold price, and quiet reality market, which makes investment capital flow into the stock market.

According to the SSC’s data, in 2013, 58 out of 94 securities companies (accounting for 63 percent) incurred negative 5.267 trillion dong of accumulated loss. For fund management companies, as of the end of Q3/2013, 41 out of 47 fund management companies operated. Of which, 22 companies gained profit, six companies were handled by many measures such as dissolution, operation moratorium, suspended operations, etc.

In 2013, foreign capital flow nearly dominated the stock market. Foreign investors posted net injection of 7.667 trillion dong (equivalent to $365 million) in Vietnam’s stock market, including nearly 6.33 trillion dong of the net purchase on STC and over 1.337 trillion dong of the net purchase on HNX. Thus, 2014 stock market also expects this capital flow when the government issued the Decree 01 for loosening room for foreign investors who own bank stake from 15 percent to 20 percent.

The stock market has recorded quite brisk trading sessions in the beginning of 2014. The central bank’s decision to enlarge the room for foreign investors in local banks is expected to help the capital strongly flow into the market and maintain at high level. Of which, there have been sharp increases in prices of bank shares, especially in the trading session on January 7, 2014. According to the local Newswire Vietstock, together with above information, the stock market always witnesses gains before the lunar New Year festival.

For the expectation of foreign capital flow, Vietstock’s analysts said, in theory, this will be positive information affecting transactions of foreign investors and the market, especially in blue chip shares. However, profit picture of foreign investors is sustainable attractiveness for foreign capital flow.

According to deputy director of analysis and investment consulting unit of Bao Viet Securities Company Nguyen Xuan Binh, foreign ownership increase in banks does not much affect stock market, but it mainly supports long term side when foreign strategic investors are allowed to have more ownership rate in banks, which can attract foreign investment capital in banks in the long term. This room, loosening is outside the market’s expectation because investors are waiting for higher room, loosening for foreign investors in public joint stock companies.

Chair of the SSC Vu Bang said that 2014 will have more advantages in the stock market because the government’s measures and programmes that have been implemented in recent time begin to take effect and are on track direction.

According to Bang, favourable macro economic solutions will be basis for the stock market to have sustainable development steps. Besides, many support measures for the market such as extending trading time, implementing new indexes, suggesting solutions to increase the attraction of foreign capital flow for the stock market, etc. positively affected the stock market in 2013 and will open new development prospects in 2014.

 


Category: Stocks

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