As demand picked up strongly in the afternoon session on Tuesday, the local market staged a strong rebound after just one day of correction while turnover got a boost from a widened trading band to nearly VND1.2 trillion.
The main index opened in the red with trading rather sluggish because investors were overwhelmed by the fear of deep correction. There was also fear that the increased trading band could lead to larger losses during a correction.
The afternoon session came back very strong, buoyed by strong bids from the foreign group that might have lifted the hanging concern of local investors. The VN-Index finally settled at 461.42, gaining 2.45 points, or 0.53% against the previous day.
The HNX-Index put in a strong performance with a 1.57 point advance to close at 62.19. Turnover on the Hanoi market increased to VND849 billion as short-term players increased their activity on expectations of better and faster profit potential thanks to the increased trading band.
Viet Capital Securities Company noted that the participation of foreign investors was very blurry on Tuesday morning, which could in sequence be the reason why local investors chose to wait and observe this group during early trading hours.
The net buying value of this group shed 28%, marking the lowest level in January and equaling only 23% of the peak net buy recorded on January 9.
This amount, however, was still twice the average net buy of foreigners just a month ago if large block deals of MSN were taken out. This was also the 16th day in a row the group net bought on the southern bourse.
HCMC Securities Company said it had seen a shift to small cap and domestic plays while other counters have consolidated in recent days. On Tuesday, there were some sharp upward breaks in a number of mid-size property stocks on expectations that the government will come out with effective measures to support this struggling sector.
“Hence a combination of steady distribution, a switch into laggards coupled with some fairly shallow corrections in leading issues all point to robust sentiment and the fact that the market believes the rally is not over yet. Previous comments including our most recent strategy pieces have all noted that observable margin trading positions have risen moderately and much of that only in the past week or so. That points to the rather cautious approach being taken by individual investors so far which also bodes well for the medium-term outlook,” it said.
The Saigon Times Daily