Busier trading last Tuesday on the HCM City Stock Exchange helped the VN-Index pull off an overall gain of 0.92 percent on an otherwise sluggish week, closing on Friday at 481.96 points.
On the Ha Noi Stock Exchange, the HNX-Index rose by an even more substantial 1.96 percent on the week, to a Friday close of 160.35.
The State Bank of Viet Nam’s announcement on Tuesday that it would keep the prime rate unchanged through February helped calm investor worries about reignited inflation.
"Investors were cheered by this news," said FPT Securities Company analyst Nguyen Tuan, noting that the VN-Index climbed from 480.91 to 497.90 in a single day.
Positive results from the Government’s overseas bond sales also hit the market that day and were greeted enthusiastically, Tuan said.
Foreign investors also helped sustain the market last week, he added, as they remained net buyers throughout the week of a net of 5.7 million shares on both markets, worth a combined VND239.1 billion (US$12.9 million).
Despite the rallying indices, trading volumes remained poor, at a daily average of less than 25.8 million shares on the southern bourse, worth a daily average of just over VND1 trillion (US$57.3 million), a decline of 26.7 percent from the previous week.
In Ha Noi, meanwhile, the average daily value of trades dropped 20.8 percent from the previous week to VND530 billion ($28.6 million), averaging a volume of 16.72 million shares.
"Conflicting economic news confused market trends and many investors just took a break," said Dao Van Khanh, an analyst with a Ha Noi-based brokerage, noting that the news of the unchanged prime rate came only a day before the release of higher-than-expected inflation figures for January.
"While worries about inflation were eased by the central bank’s announcement, the news of January’s CPI refuelled concerns at a time when consumer demand is always higher than normal heading into the Tet [lunar new year] holiday," Khanh said.
Investors also seemed hyper-sensitive, he said.
Vincom Securities Company analysts, meanwhile, detected an increased flow of capital toward companies that had either reported particularly strong earnings or particularly large losses (Like Nam Viet Corporation), suggesting a likely return of speculative behaviour on the market.
Demand for shares could be seen strongly in some sessions, and then disappearing immediately, he observed, a phenomenon discouraging other investors.
Tuan also saw transactions improving only after the prices of certain shares had either nosedived or soared, patterns which reflected day-trading strategies.
"Trading will continue to slow in the next couple of weeks as Tet approaches," Tuan predicted, expecting a VN-Index that marched in place within a range of 460-490 points.
He recommended buys or sells only on days in which the market fluctuated more than 1 percent.
Khanh also predicted that day trades would govern the market in the coming days, as well as likely unfavourable moves on Wall Street. "We will continue seeing more ups and downs and slower trading," he said, with the market only likely to be favourable to long-term investors.