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Share set to increase, facing corrections

Vietnamese stock market is forecast to move higher this week, where correction and volatility is expected.

 

A steel production line of Hoa Phat Group (HPG). HPG rose 16 per cent last week. — Photo hoaphat.com.vn

 

The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HOSE) decreased 1.16 per cent to end at 852.74 points.

The index had gained 3.1 per cent last week.

An average of 308.2 million shares were traded on the southern exchange during each session last week, worth VND5.5 trillion.

“The VN-Index is forecast to head toward resistance 860-880 points early next week, where there could be adjustments,” said Nguyen Duc Hoang, market strategy analyst at Bao Viet Securities Company (BVSC).

“The market is also expected to fluctuate widely next week with the review session of EFTs tracking MSCI,” Hoang said.

“Foreign investors have also balanced out their net buying and selling activities recently,” he added.

“Stock exposure should be maintained at 30-40 per cent of the portfolio. Investors should continue to hold current positions and hold off on buying new stocks. They should consider selling short-term positions at the resistance 860-880 points zone,” he said.

Since the beginning of April, the VN-Index had increased by 30 per cent, said Nguyen Hong Khanh, head of market analysis at Viet Nam International Securities Joint Stock Company (VIS).

“It can be seen that VN-Index recorded strong gains during the first four sessions last week but the cash flow was gradually weakened. The collapse in the last session of the week was inevitable when the ability to absorb stocks decreased while profit-taking pressure increased,” Khanh said.

“Investors wait for some notable events on the international market this week, including rising conflicts between the US and China over Hong Kong and Taiwan issues. The US has just passed a ban on Chinese companies from listing shares on the US exchanges or raising money from US investors if they do not obey Washington's audit standards,” Khanh said.

According to Ngo Quoc Hung, professional senior market researcher, Market Strategy Division, MBS Securities, the domestic stock market had witnessed the third increasing week in a row.

“A new large cash flow has been poured into the market thanks to the new trading accounts opened in March and April. Therefore, it is likely that the market will continue going up this week but the profit-taking pressure will increase when the market enters the area of 863 points,” Hung said.

“The VN-Index increased by 3.11 per cent last week but the liquidity decreased in most index groups, showing that investors have become more cautious,” Hung said.

“In Q1, most of the industries were strongly affected by the coronavirus crisis, with the most significant ones being retail, aviation, textile, fishery, transportation and banking,” said Nguyen Hong Khanh, head of market analysis at Viet Nam International Securities Joint Stock Company (VIS).

Last week, the banking group was the main pillar leading the market up. Most stocks in the industry marked a successful trading week such as Vietcombank (VCB), Vietinbank (CTG), Techcombank (TCB) and Bank for Investment and Development of Viet Nam (BID).

The steel group also outperformed last week. Big players of Nam Kim Group (NKG), Hoa Phat Group (HPG) and Hoa Sen Group (HSG) made impressive breakthroughs. HPG led the way with a strong increase of 16 per cent, HSG recorded an increase of nearly 10 per cent.

The minor HNX-Index on the Ha Noi Stock Exchange (HNX) rose 1.23 per cent to close Friday at 107.04 points.

The northern market index had lost a total of 1.82 per cent last week.

An average of 62.9 million shares were traded on the exchange during each session last week, worth VND640 billion. — VNS

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