Benchmark indices on both national stock exchanges slumped yesterday as cash flowed towards the gold market.
Domestic gold prices hit up to VND46.7 million (around US$2,100), an increase of VND350-400,000 ($17.3) per tael over Tuesday's prices. (One tael equals 1.2 ounces.)
The uptrend in gold prices has continued for nearly three weeks, coinciding with the time the local stock market has been declining.
"Gold trading is proving to be more attractive, and the indices will not rally unless there is sufficient economic support," said analysts from FPT Securities Co.
"Although the pressure to sell at low prices has seemed to halt, market value cannot improve if money continues to stay outside of the market," said PetroVietnam Securities Co analyst Dao Hong Duong.
On the HCM City Stock Exchange, the VN-Index reversed earlier gains to conclude trades at 405.19 points, a decline of 0.8 per cent from Tuesday's session. Market value tumbled 10 per cent to VND502.5 billion ($23.5 million) while the volume of trades dropped 18.5 per cent to 24.3 million shares.
Advancers outnumbered decliners by about two-to-one, and none of the top 10 leading shares by capitalisation managed gains. Only real estate developer Hoang Quan (HQC) saw a volume higher than a million shares.
On the Ha Noi Stock Exchange, the HNX-Index also declined by 0.8 per cent to close 64.60 points. The value of trades fell to an anaemic VND255.8 billion ($11.9 million) on a volume of 24.8 million shares. Losers overwhelmed gainers by 146-73.
"The downtrend will continue if the index cannot reach higher than 67.39 points," opined VietCapital Securities analyst Truong Le Minh.
Kim Long Securities Co (KLS) became the most-active share nationwide, with 2.65 million traded.
Foreign investors shifted to buying in HCM City, picking a net of over VND150 billion ($7 million) worth of shares, but they concluded the day as net sellers in Ha Noi by a narrow margin of just VND130 million ($6,100).
VietCapital Securities Co analysts recommended investors pick up shares of PetroVietNam Drilling and Well Services (PVD) for their long-term (one-year) portfolios due to the company's stable operations.
PVD earned $116.7 million and posted a profit of $15.5 million in the first nine months of the year, a performance essentially unchanged from the same period last year despite the nation's economic difficulties.
"In addition, PVD has the advantages of using dollars in its cash flows and enjoyes low borrowing costs," said the analysts. They valued PVD at $2.10 per share even though it was currently trading at around VND36,000 ($1.70).
(source: VNS)
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10/11/2011 10:44:28 AM | 