- Nation’s largest listed company added to MSCI index Thursday
- Vietnamese gauge reverses advance on Friday to close lower
Vietnamese stocks had their best week in 10 months after the country’s largest listed company was added to an MSCI Inc. index and as a recovery in oil prices buoyed demand for riskier assets.
The benchmark VN Index rose 4.5 percent since Aug. 5, the second-biggest increase in Asia and the seventh-best among more than 100 gauges worldwide. It fell 0.7 percent on Friday after being up as much as 1.3 percent earlier. Vietnam Dairy Products JSC, or Vinamilk, declined 0.6 percent on Friday, reversing a 3.6 surge, and was up 6.3 percent for the week as MSCI said Thursday that it would be added to its frontier markets index.
“The rally in the oil price and generally strong sentiment have played a part but Vinamilk’s performance has been a major contribution,” said Kevin Snowball, chief executive officer of PXP Vietnam Asset Management in Ho Chi Minh City. The stock will “doubtless” be added to the two Vietnam exchange-traded funds next month, he said, adding that he remains “very bullish” for the rest of the year.
Vietnamese shares have rallied 13 percent in 2016 amid optimism the government will open up the market to more foreign investment. Vinamilk received approval from the State Securities Commission last month to remove the 49 percent foreign ownership limit on its stock, spurring speculation more companies will follow. The country’s economy is forecast by analysts to grow 6.3 percent this year, among the fastest rates in Asia.
The nation’s sovereign bonds have also rallied this week, with the five-year yield falling seven basis points to a two-month low of 6.07 percent, according to fixings from banks compiled by Bloomberg. The dong was steady on Friday and for the week at 22,301 a dollar.