Bank Stocks Likely to Move Higher: Brokers

After the FTSE announced its quarterly review of its FTSE Vietnam Index, investors looking to profit from the change in demand from ETFs (ended trust funds) using the FTSE Vietnam Index as their benchmark, should get ready to see some heavy buying on STB and VSH, Viet Capital Securities Co. (VCSC) said.

“Having already been outperforming the index lately, we think bank stocks will probably benefit from this additional demand from the ETF. We could expect to see renewed interest in STB and MBB, which was included the FTSE Vietnam All-Shares Index, pushing their prices even higher,” the broker said.

The markets continued to attract investors with all indices making impressive gains last week. After four rising sessions, the VN-Index hit record highs since last September, gaining 3.8% from the previous week to close at 439.6. The southern market attracted a record cash flow, at VND11.3 trillion, during the week.

HCMC Securities Corp. (HSC) said in last Friday’s report that the market jumped on the combination of ongoing speculation about lower interest rates coupled with some excitement about plans to restructure the stock market, which may lead to much improved stock market liquidity longer term.

“Resistance was overcome quite quickly by persistent buying pressure and it now seems the VN-Index is ready to climb one or two more steps on the ladder towards 500 points as early as next week. A classic momentum driven rally with shallow corrections as players scramble to employ spare cash while behind the scenes, the banking system’s liquidity has already improved dramatically.”

VCSC also noted that trading hours will be extended on Monday for a three-month trial period. Trading will run from 9:00 a.m. to 11:30 a.m., and resume after a break from 1:00 p.m. to 2:15 p.m.

“We are hoping it will increase liquidity as markets will have the opportunity to increase trade when more information comes,” the broker said.

The Hanoi market made significant gains given four rising and one losing session last week, with the HNX-Index advancing 4.65 points, or 6.93%, against the previous week to close at 71.72. The market’s liquidity was slightly higher with the average daily volume of 86.6 million shares worth VND737 billion, falling by 18% and 22.4% from a week earlier respectively. The market is expected to move up again this week.