Shares not ready for stable growth on concerns over persistent risks

A three-day rally does not mean Vietnamese shares have returned to the growth track as risks are still persistent and there is no clue they have faded away, experts have said.

Shares not ready for stable growth on concerns over persistent risks

A street with very few people in Ha Noi on April 2. The social-distancing order, starting on April 1, will end in 10 days but it remains uncertain whether local businesses can stand as the coronavirus pandemic is clearly weakening market demand. 

Viet Nam’s benchmark VN-Index on the Ho Chi Minh Stock Exchange has rallied a total of 6 per cent in the last three days to finish last week at 701.80 points.

The VN-Index made a weekly gain of 0.82 per cent and it has bounced back significantly by 6.46 per cent from a 3 ½-year low of 659.21 points on March 24.

The rally of the market clearly enhances the market sentiment and maybe some investors are looking forward to a stronger recovery, even in the short term.

But reality may destroy those believers as the global markets are quite vulnerable at the moment.

Sai Gon-Ha Noi Securities Co’s deputy director of market analysis Ngo The Hien said trading liquidity in the last three days was lower than that made before.

“It proves the VN-Index has only had a technical recovery and it will head to the short-term target of 730 points.”

Vietnamese shares have moved up because global markets are now in their short-term uptrends, Nguyen Anh Khoa, director of analysis and investment consultancy at Agribank Securities Co, told tinnhanhchungkhoan.vn.

“But I don’t think the recent rally can last long as foreign investors are still net-selling on a large scale and the VN-Index itself is approaching the short-term resistance of 720-730 points,” Khoa said.

Foreign investors last week offloaded a total net value of VND1.2 trillion (US$51 million), down 20 per cent from the week before.

Since January 30, foreign investors have sold a total of VND12.8 trillion worth of Vietnamese shares.

“Investors will likely sell out to earn profits in the resistance zone and the market sentiment may reverse easily,” he said.

Analysts’ worries may come from the fact that coronavirus and the global pandemic caused by the virus, called COVID-19, have not been totally controlled.

 

The number of new infection cases continues rising each day. On Sunday, there were more than 14,200 new cases, raising the total number to more than 1.2 million cases, according to worldometers.info.

Viet Nam on Sunday reported the 241st case and a total of 91 patients that had fully recovered.

The social distancing order, which came into effect on April 1, will end on April 15. It remains uncertain how local businesses will recover after the next 10 days as the virus will still weigh on both domestic and global economies.

“Most investors believe the market will soon decline,” Sai Gon-Ha Noi Securities Co (SHS) said in its daily report. “News on the COVID-19 pandemic will be the key factor to investors at the moment.”

Agriseco’s analyst Khoa said the domestic market may rise only if a vaccine is created to contain the virus and the pandemic is under control.

“It takes time to produce a vaccine for the virus. So now investors will look to the total number of cases in key markets such as the US and Europe while they are counting that Viet Nam will have a successful 15-day period of social distancing,” he said.

“Then the market will settle down and recover. The economy is surely hit by the pandemic this year, but it can be offset by stimulus packages for public investment, and business and labour assistance.”

The Vietnamese Government is expected to announce a VND36-trillion support package for labourers and poor people that have been hit by COVID-19.

On a global scale, governments and central banks have also announced trillions of dollar worth of financial stimulus for their economies, hoping companies would be strong enough to stand until the pandemic is over.

At the moment, companies have not given any hints about their earnings in the first quarter and forecast for the whole year, according to Vu Minh Duc, director of market research and analysis at VietCapital Securities Corp (VCSC).

“The slow disclosure of such information may make investors unable to assess the prices of stocks and the future movement of the market,” he said.

The market will return to its positive track when a majority of investors feel shares have fallen to very cheap price levels and they find opportunities in local assets, he added. – VNS

 
 

Other News

.
Hoa Binh: attractive destination for investors
Hoa Binh: attractive destination for investors
BUSINESSicon  04/11/2021 

In an effort to attract investment, especially from the start-up community and young entrepreneurs, the authorities of Hoa Binh province have issued special incentive policies.

Vietnam Airlines officially receives FAA permit to run direct flights to US
Vietnam Airlines officially receives FAA permit to run direct flights to US
BUSINESSicon  16/11/2021 

National flag carrier Vietnam Airlines on November 16 officially received a permit from the US Federal Aviation Administration (FAA) to operate non-stop commercial flight service between Vietnam and the US.

Mekong Delta has some 2.5 million tons of rice left for export
Mekong Delta has some 2.5 million tons of rice left for export
BUSINESSicon  16/11/2021 

With the local rice demand taken into account, the Mekong Delta region has some 2.5 million tons of rice left in November and December that can be exported.

Vietnam-South Korea bilateral trade to hit $70 billion this year
Vietnam-South Korea bilateral trade to hit $70 billion this year
BUSINESSicon  17/11/2021 

The bilateral trade turnover between Vietnam and South Korea reached $63.4 billion in the first 10 months of 2021 and is likely to exceed $70 billion by the end of the year.

Green economy absorbs in green consumption behaviors
Green economy absorbs in green consumption behaviors
BUSINESSicon  16/11/2021 

Countries in the world have been making efforts to demonstrate their commitments to the climate change battle with the aim to minimize negative impacts on ecosystems and develop a green economy.

Retail revenue likely up 3-4% by year-end, compared to 2020
Retail revenue likely up 3-4% by year-end, compared to 2020
BUSINESSicon  16/11/2021 

Thanks to an expected upturn in retail demand between now and the end of the year, the total revenue for 2021 is expected to have grown by three to four per cent, when compared with the previous year. 

Several listed foreign firms report lower profits and losses in 2020
Several listed foreign firms report lower profits and losses in 2020
BUSINESSicon  16/11/2021 

The majority of foreign-invested enterprises listed on Vietnam's stock market either posted lower after-tax profits or losses in 2020 due to the impact of the COVID-19.

VIETNAM BUSINESS NEWS NOVEMBER 16
VIETNAM BUSINESS NEWS NOVEMBER 16
BUSINESSicon  16/11/2021 

Foreign paper hails Vietnam as economic success story

Vietnam Airlines’s additional shares to be officially traded from Nov. 19
Vietnam Airlines’s additional shares to be officially traded from Nov. 19
BUSINESSicon  15/11/2021 

The Ho Chi Minh Stock Exchange (HoSE) has announced the additional listing of nearly 800 million shares of Vietnam Airlines Corporation, coded HVN, from November 15.

E-commerce promotes Vietnam's digital economy
E-commerce promotes Vietnam's digital economy
BUSINESSicon  16/11/2021 

While tourism has been hit hard by Covid-19, e-commerce has become the driving force for the digital economy in Vietnam this year.

HCM City distribution chains ensure food supply
HCM City distribution chains ensure food supply
BUSINESSicon  16/11/2021 

Nearly 1,600 workers at a supermarket chain tested positive for coronavirus when the fourth Covid wave in HCM City reached its peak over the summer. One of them died.

Farm exports to EU must follow food hygiene requirements: experts
Farm exports to EU must follow food hygiene requirements: experts
BUSINESSicon  16/11/2021 

After one year of EVFTA (EU-Vietnam Free Trade Agreement) implementation, Vietnam’s farm exports to the EU have increased sharply.

Four ‘economic commanders’ at NA forum share their vision about stimulus package
Four ‘economic commanders’ at NA forum share their vision about stimulus package
FEATUREicon  15/11/2021 

All four ministers of economy-related fields were asked to answer inquiries at the last National Assembly session, a rare occurrence in Vietnam.

Railway goods transport between Vietnam, China surges
Railway goods transport between Vietnam, China surges
BUSINESSicon  15/11/2021 

The total volume of goods traded between Vietnam and China going through the two border-gate railway stations of Lao Cai and Dong Dang reached more than 838,000 tonnes in the first nine months of 2021, up 43 percent year-on-year.

2021's profit outlook mostly reflected in stock prices: FiinGroup
2021's profit outlook mostly reflected in stock prices: FiinGroup
BUSINESSicon  15/11/2021 

The Vietnamese stock market’s valuation is equivalent to 18.2 times 2021’s profit and 14.3 times 2022’s profit forecast, said Fiin Trade, showing that the profit prospects for 2021 are reflected in share prices.

VN's growth and recovery require strong public investment: economists
VN's growth and recovery require strong public investment: economists
BUSINESSicon  15/11/2021 

Financing public investment to generate future growth and to speed up economic recovery post-COVID-19 remained Vietnam's most important challenge in the near future, said economists and policymakers. 

VIETNAM BUSINESS NEWS NOVEMBER 15
VIETNAM BUSINESS NEWS NOVEMBER 15
BUSINESSicon  15/11/2021 

More effective use of trade remedy tools needed when joining FTA: experts

Nursing home market nascent in Vietnam: Savills
Nursing home market nascent in Vietnam: Savills
BUSINESSicon  15/11/2021 

Demand for “housing with care” – a range of residential formats (which often provide care services) for older people – is increasing, but the market remains almost untouched in Vietnam, according to property consultancy Savills Vietnam.

Online shopping in VN to soar by year-end
Online shopping in VN to soar by year-end
BUSINESSicon  15/11/2021 

 Online shopping in Vietnam is expected to increase sharply near the end of the year. 

Market looks for new sources of goods as divestment from state enterprises proceeds
Market looks for new sources of goods as divestment from state enterprises proceeds
FEATUREicon  16/11/2021 

The situation changed in a positive direction when the stock market and and stock prices went up. This will enable divestment from SOEs and the equitization process to take place more easily.

 
 
 
Leave your comment on an article

OR QUICK LOGIN