VN-Index rebounds, propped up by PMI data and interest cuts

09:01 | 02/07/2020
Vietnam’s benchmark VN-Index surged on Wednesday after a six-day losing streak as investor sentiment improved following solid data of PMI in June and steep cuts in interest rates of some banks.
vn index rebounds propped up by pmi data and interest cuts
Customers at Vietcombank's branch in Hanoi. Shares of the bank increased 3 per cent yesterday to VND82,700 ($3.55) per share. - VNS Photo Mai Huong

The VN-Index recouped 2.23 per cent to close Wednesday at 843.49 points after losing 5.4 per cent in the previous six sessions.

Large caps led the market when 26 of the top 30 shares by market value and liquidity on the Ho Chi Minh Stock Exchange gained value, half of which increased by between 2 per cent and 7 per cent.

Strong gains of heavyweight stocks such as Vincom Retail (VRE), brewer Sabeco (SAB), Vietcombank (VCB), Vietinbank (CTG), Bank for Investment and Development of Vietnam (BID), steelmaker Hoa Phat Group (HPG), Masan Group (MSN), Vingroup (VIC) and Phu Nhuan Jewelry (PNJ) had positive impacts on investor psychology.

On Wednesday, shares of banks, securities companies and realty firms also increased substantially on investors’ hopes of better business results of these stock groups in the second half of this year.

Big gainers included Military Bank (MBB), Vietnam Prosperity Bank (VPB), Sacombank (STB), Saigon Securities Inc (SSI), Ho Chi Minh Securities (HCM), MB Securities (MBS), VNDirect Securities (VND), Hoa Binh Construction (HBC), Coteccons Construction (CTD), Dat Xanh Grou[ (DXG), FLC Group (FLC).

A survey of Nikkei and IHS Markit released on Wednesday showed the Vietnam Manufacturing Purchasing Managers' Index (PMI) posted 51.1 in June, up from 42.7 in May and above the 50.0 no-change mark for the first time in five months. The reading represented a continuation of the recovery seen since the PMI hit a record low in April.

In addition, a number of banks, including big ones such as Vietcombank, Vietinbank and BIDV announced a reduction in deposit interest rates since early July given abundant liquidity but low credit growth.

According to Le Ngoc Nam, head of analysis at Tan Viet Securities JSC, business results in the first quarter were pessimistic, though it was not the time to implement social distancing, with 54 per cent of companies posting negative growth – the worst number since the global financial crisis in 2008.

But he predicted the market has recovered recently thanks to investors’ confidence in timely support packages of the Government to the economy and businesses will soon return to normal and resume activities.

Along with the continuous decreases in interest rates, the market may continue to welcome a new wave of investors, and this will continue to be one of the market's drivers, he said.

On the Hanoi Stock Exchange, the HNX-Index also gained 1.75 per cent after three-day losses, closing Wednesday at 111.69 points.

A total of 339.4 million shares worth almost VND5 trillion (US$214 million) were traded in the two markets.

VNA

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