Shares will continue to rise this week as investor sentiment remains positive, analysts say, driven by expectations that good earnings reports will be released in the “shareholder meeting season.”

Investors at MayBank Kim Eng Securities Company. 

Analysts with BIDV Securities Corp (BSC) say that the high expectations of good first quarter performances is directing the flow of money in the market towards companies that had been forecast to do well but are yet to produce expected figures.

For example, steel producers’ stocks are moving up after underperforming for a while.

“The stock market will likely increase this week as listed large-cap firms are about to reveal their first quarter performances,” said Nguyen Ngoc Lan, head of the brokerage division at Agribank Securities Company.

The market could increase further after blue chips ended Friday in the positive territory and foreign investors remained net buyers though their purchases declined sharply, Lan said.

Foreign investors recorded a net buy value of VND225.6 billion in Viet Nam’s stock market last week, down 74.5 per cent from the previous week.

It is not surprising that the benchmark VN Index has reached new heights recently, said Vu Minh Duc, head of individual customers division with Viet Capital Securities Company (VCSC).

The benchmark index has entered a development stage that could range between six and 12 months since it successfully overcame the mid-term resistance range of 690-695 points, he said.

The short-term resistance level for the VN Index is 730 points for now and 750 points for the next one or two months, Duc added.

However, BSC analysts have warned that the market could also face a correction if the released earnings reports fail to meet investor expectations.

The market could also be pulled down by the pressure of profit-taking that targets stocks that have risen recently based on forecast first-quarter earnings.

“The positive effects created by expectations for good earnings reports can decline…, then stock performances could be a mixed bag.

“Investors should look for opportunities in stocks that have good, basic background information or are supported by good business news such as M&A deals and restructuring processes,” VCSC analyst Duc said.

An example last week was Sacombank. The bank’s shares have soared nearly 18 per cent since March 28 after speculation emerged on its restructuring process.

Viet Nam’s benchmark VN Index on the HCM Stock Exchange was up 0.7 per cent to close Friday at 727.95 points. The benchmark index finished 0.8 per cent higher than the previous week.

The minor HNX Index on the Ha Noi Stock Exchange fell 0.6 per cent to end Friday at 90.15 points. The northern market index has dropped 0.7 per cent week on week.

Market trading liquidity increased from the previous week with an average of more than 259.4 million shares worth VND4.9 trillion (US$219 million) being traded in each session.

Trading volume and trading value rose 0.4 per cent and 11.2 per cent respectively over the previous week. 

VNS