Vietnam's stock market rises on signs of smooth power transition

Vietnam's stock market recorded its highest opening on Wednesday, briefly extending this week's rally, with investors buoyed by signs of political stability after a senior Communist Party meeting agreed on candidates for the next five-year leadership.

The plenum of the party, which has led Vietnam unopposed for decades, ended on Tuesday with messages of unity from party chief To Lam. Lam is widely expected to keep his post as the country's most powerful official when the party ratifies the plenum's decisions at its quinquennial congress in January.

The index opened up 1% at 1,791.46, before retreating. It followed the strong gains made on Monday and Tuesday, which multiple brokers linked to the perceived smooth power transition ahead of next month's crucial party congress.

The index was up 0.4% as of 03:27 GMT after a volatile session.

Foreign investors, net sellers in recent months, became buyers on Monday and Tuesday as the party announced it had already selected candidates for the next leadership positions. It did not give names, but speculation grew that Lam would keep his job as party chief.

Overseas investors bought nearly $50 million of stocks on Vietnam's main market on Monday and Tuesday, driving up the market by 2.7% and 1.2% respectively.

"The market is focused on who holds the top position, and the retention of the top position signals policy consistency going forward," a Vietnam-based broker told Reuters on Wednesday, referring to speculation that Lam would remain in his post. He declined to be named as politics is sensitive in Vietnam.

-Phuong Nguyen/Reuters