Stocks stall but analysts expect traction
Stocks stall but analysts expect traction
Stocks mostly tread water over the course of last week, but some analysts were predicting a weak rally in the coming week. Among reports issued by analysts from 10 securities companies, four said the market could rebound, while others expected it to continue to flatline.
Last week's reduction in petrol prices seemed to have had little impact on the market. The nation's overall inflation for the year was expected to reach about 8 per cent, and the modest changes in fuel costs were not expected to significantly shift that result. Retail petrol prices have been raised or lowered six times so far this year, cut by a combined VND3,700 per litre but raised by a combined VND6,050. In short, the net impact of all the adjustments has been nil.
On the HCM City Stock Exchange last week, trades also ground to an inconclusive end by Friday afternoon. The VN-Index ended the session on Friday at 385.71 points, a loss of 0.26 per cent from the previous week's close, while in Ha Noi, the HNX-Index rose by 0.45 per cent to end the week at 51.81 points.
The volume of trades was up 4.1 per cent on the southern bourse and rose by 14.8 per cent in Ha Noi, mostly on the strength of strong transactions in shares of Sai Gon-Ha Noi Bank (SHB), NaviBank (NVB) and real estate developer Sacomreal (SCR).
Banking stocks overall offered support for the market, with shares of Vietcombank (VCB) and Vietinbank (CTG) performing strongly and a few commercial banks releasing solid earnings data for the first nine months of the year. Vietinbank saw an impressive 70-per-cent growth in profits, while profits of Military Bank (MBB) rose by 26 per cent. Many commercial banks have suffered terrible losses, however, and the average profit in the sector was off by 40 per cent from the same period last year.
Foreign investors were net buyers on both stock exchanges last week, although by low volumes. Net buys in HCM City reached VND85.8 billion (US$4.085 million) and VND3.8 billion ($180,960 ) in Ha Noi.
After a long period of declines, sell pressures had eased, said VietCapital Securities Co director Robert Zielinski, adding his voice to the predictions that the market would further rebound this week.
But he nevertheless cautioned that sell pressures would remain at resistance levels of 390 points for the VN-Index and 52.50 points for the HNX-Index. Investors with cash on hand could increase their buys if both indices broke these resistance marks.
"The sharp decline in liquidity is also an indicator that the tumble is about to end," Zielinski wrote in a report released on Friday. "With the slight recovery next week, there are opportunities in penny stocks."
In the coming week, investors were likely to be influenced by growing rumours regarding the establishment of a State asset management company, with details about the establishment expected next month or earlier next year.
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