Vietnamese shares moved sideways this week as investors kept a cautious stance on uncertainty of the new US president’s policies, and they could seek short-term profits in speculative stocks that made significant gains last week.

The benchmark VN Index on the HCM Stock Exchange finished last week at 679.2 points, a weekly increase of 1.9 per cent.

The HNX Index on the Ha Noi Stock Exchange ended Friday at 81.19 points, up 0.9 per cent from the previous week.

Market trading liquidity remained modest with nearly 160.3 million shares being traded in each session, worth VND2.53 trillion. Last week’s figures increased by 2 per cent in volume and nearly 6 per cent in value from the previous week.

The market’s gains last week were triggered by investors’ bottom-picking, especially on Wednesday as the stock indexes fell sharply during intra-day trading after the Republican Donald Trump was announced as the 45th US President.

Donald Trump’s victory could have bad signals for global trade as the new US president is well-known for his disapproval of free trade agreements that the US has been a part of and analysts raised concerns over an outflow of investments from emerging markets.

The market’s gains last week were also attributed to significant rises in global commodities prices, including copper, rubber and coal, leading to strong gains seen in the stocks of the companies in the rubber plantation and mining industries.

Binh Thuan Mineral Industry JSC (KSA) jumped 22.4 per cent last week, KSH Investment and Development JSC (KSH) soared 47 per cent, Dong Phu Rubber JSC (DPR) rose 11.7 per cent, and Phuoc Hoa Rubber JSC (PHR) surged one-fifth.

Those gains could trigger profit-taking this week as some analysts considered the increase of commodities prices as unstable and uncertain, while the mining sector “consists of various illiquid small cap players so access is probably limited to individuals and specialist funds only,” HCM Securities Corp (HSC) said in a note.

Another issue that investors should take into account is the global uncertainty of Donald Trump’s new policies on US political and economic development, which have remained unclear and little known, HSC said.

“People would also look to what the makeup of the Trump cabinet looks like for policy clues,” HSC added. “However, markets will also be affected in the short term by his social media commentary which promises to be prolific.”

In fact, Trump’s initial views on global trade could firstly undermine logistic and port firms as well as textile and garments exporters because of his antipathy to free trade agreements.

The energy sector could also weigh on investor sentiment this week after the Organisation of Petroleum Exporting Countries (OPEC) reported late last week an increase in its output, and Iran, one of the leading members, raised output by the most since international sanctions were lifted and showed an unwillingness to cut production.

Brent crude fell 3.5 per cent in two days to end last week at $44.75 a barrel and US crude WTI slumped 4.1 per cent during the same period to $43.41 on Friday’s closing. 

VNS