(Photo: VnExpress)

Liquidity improved strongly last week, despite trading boards falling into the red on the Ho Chi Minh City bourse at the end of the week ending on August 29, as investors saw signs of good news ahead.

The VN-Index rose 12.12 points or 2.42% over the week to close at 539.1. The gain was mainly thanks to a 34.69 point jump after a strong trading on Monday and Tuesday.

The index lost 22.75 points in the last two days of the week as investors cashed in before the holidays.

Trading volume reached 147 million shares, a 9.3% increase over the previous week, while total turnover rose by 18.5% to VND 6.23 trillion (US$377.58 million).

Solid gains by some major stocks including Saigon Securities Inc (SSI) and Sacombank (STB) contributed to the increase in revenue, according to Nguyen Truong Son, an analyst with FPT Securities.

Early week trading was spurred by a low August inflation rate, as the General Statistic Office announced inflation was up only 1.56% month-on-month. Investors had predicted a three% rise, after the Government raised petrol prices by 30% on July 21.

“The low inflation index proves the Government has the capacity to control prices,” said Son.

Investors were buoyed by news of stable exchange rates and reduced interest rates for loans.

The State Bank of Vietnam (SBV) on August 29 decided to keep the prime interest rate at 14%, and to triple the interest rate of commercial bank reserves from 1.2% to 3.6%, to help credit institutions lower lending interest rates.

“These moves are good signs, which show that the Government is gradually shifting to the goal of accelerating GDP growth, in conjunction with adjusting monetary policies,” said Son.

“The adjustment doesn’t have a great impact on the banking system, but will support investor confidence,” he said.

Earlier last week, the Ministry of Planning and Investment reported a record US$47.2 billion worth of foreign direct investment (FDI) into the economy in the first eight months of this year, more than four times the amount of last year.

Do Hoai Nam, an analyst with Kim Long Securities, predicted that there would probably be an upward trend in share prices this week if world oil prices remained at current levels.

Foreign investors were net sellers on domestic bourses last week, buying an average of three million shares and fund certificates per day, and selling 4.4 million.

“Despite the market decline in the last two days of the week, demand for shares still remained great,” said FPT analyst Nguyen Truong Son. “With oil prices declining and the domestic economy having stabilised, we expect the VN-Index will not fall below 520 points this week and will bounce back shortly.”

The analyst predicted that the VN-Index would range between 530 and 550 points this week.

At the Hanoi Securities Trading Centre, the HaSTC-Index closed at 192.43 after gaining 28.26 points or 17.2% over the week. About 14.7 million securities changed hands, and trading values averaged VND 397 billion (US$24 million) per day. (VNA)