HCMC – Although the local market suffered a losing week due to low liquidity last week, securities companies predicted the VN-Index would bounce back slightly as company earnings reports are out this week.
With three rising and two falling sessions, the VN-Index lost 0.87 point, or 0.19%, from the previous week to 458.39. Liquidity plunged deeply as the daily trading volume averaged at 25.2 million shares worth VND664 billion, down 33.6% and 31.8% from a week earlier respectively.
APEC Securities Co. said listed enterprises are expected to report good earnings results this week and this will help improve investor sentiment after a couple of weeks of dull trading. This is seen as an opportunity for long-term investors to buy stocks with positive financial outlooks as share prices have fallen to attractive levels.
“The market, however, will not recover strongly this week as most investors are still cautious. The VN-Index may move within the range of 445 and 465 points given flat trading in the coming time before entering into a sustainable rally,” APEC said.
Fiachra Mac Cana, managing director of HCMC Securities Corp., said last week the market saw a couple of trends being confirmed such as the appetite of foreign investors for a number of large cap stocks and the inactivity of the domestic investment community that seemed to be paralyzed by the overhang of a number of factors. The gold price rally certainly drew some attention away from equity markets, while the renewed weakening of the dong against the U.S. dollar on the unofficial market forced people to rush to the greenback as a safe haven.
“All these factors seem to have created an environment that resembles a bear market, but if we look over a longer period we have to conclude that we are just still in the correction phase that started in October last year,” Mac Cana said.
“The short-term strategy of the domestic investment community makes it look like we are in a correction on the way down, while from a non-emotional perspective it seems more likely that we are in a correction or consolidation on the way up.
“The difficulty here is, of course, the timing of the end of the consolidation. It could easily take a number of months for the market to digest supply issues, higher average monthly inflation and the upcoming political event early next year.”
Vietnam International Securities Co. (VIS) said investors were pessimistic due to lack of positive changes of the international and domestic economy last week. Foreign participation turned lukewarm as the investors were net buyers to the tune of 4.7 million shares worth VND282 billion, falling 3.8 times and 2.5 times from the previous week respectively.
“Liquidity will be the biggest challenge for the market this week. However, business results of listed firms will help support the market rebound as positive reports will draw the attention of investors,” VIS said.
Meanwhile, the Hanoi market shed two points, or 1.64%, from the previous week, to close at 119.69. The market’s daily trading volume averaged at 18.8 million shares worth VND421 billion, both down around 18% from a week earlier. The market is predicted to recover slightly this week.
