Shareholder list-fixing, expected foreign indirect investment (FII) floods and the demand from overseas funds also contributed to the index swell.

The index went up every day between May 7 and 11, but some investors expected it to slide over the week’s final two trading days.

Investors forecast the slide as the index increased less and less each day. It jumped 36.43 points on Monday, then slowed to a 31.82 point rise the following day and gained only 4.53 points on May 9.

By that time there was anticipation stocks would plummet, but they managed to halt at a 0.68 point gain and then surprised everyone with a 19.59 point leap on the final trading day of the week on May 11.

A securities specialist, Huy Nam, noted that investors have become more experienced, buying when prices fell and selling when they rose, rather than doing an opposite as they did the early days of the Viet Nam exchange.

Various companies fixing their shareholder lists also encourage purchases.

The strengthened index was also inspired by the additional 1.5 billion USD in FII expected to come to Viet Nam by the year’s end, as anticipated by a State Bank official at a seminar in Ha Noi on May 9.

But the most substantial cause for the index increase was the recent market adjustment that, according to analysts from the HSBC, brought the price/earnings (P/E) ratio “closer to reality”, which promoted demand.

The HSBC’s recently released report said after prospective P/E reached around 32 in March, foreign investors started to take profits and local retail investors panicked and sold as well. The index fell 21 percent from its peak on March 12 (over 1,179 points after the first trading session) to the end of April.

“The market is getting into the range where we would become cautious buyers again,” noted the report.

The analysts also said they found considerable demand from overseas funds for investment in Viet Nam, though the period of decline perturbed some overseas retail buyers.

Over 41.6 million securities worth almost 5 trillion VND in total were traded this week. Twenty-five million shares, over 13 million bonds and 3.3 million fund certificates changed hands.

STB led in trade volume with 3.45 million stocks traded. REE, SAM, CII, GMD, VNM and VSH also registered high liquidity.

Foreign investors bought over 9.5 million shares and fund certificates paying 1.4 trillion VND. Their purchases focused on CII, GMD, PPC and VNM. The foreign investors also sold 2.6 million stocks and certificates for 418 billion VND. CII, GMD, PPC, VNM and VSH all sold in bulk.

Of the 107 listed companies, 90 saw their value increase over the week and the two listed funds did the same.

The Binh Dinh Mining Company (BMC) was the biggest gainer as it grew by 23.3 percent to reach a value of 635,000, the highest price on the board at the HCM City Securities Trading Centre.

Source: VNAgency