Shares may not extend rallies through August
Shares may not extend rallies through August
Vietnamese shares have risen during the last three sessions on both the local exchanges, but this rally is not expected to sustain through the last trading week of August.
This is because investors will try to accrue profits from their recent gains, while supportive business-market information is lacking, according to experts.
The benchmark VN Index on the HCM Stock Exchange gained 0.24 per cent to finish the last trading week at 771.63 points. It has rallied totally 1.4 per cent over the last three sessions.
The HNX Index on the Ha Noi Stock Exchange added 0.34 per cent to end Friday at 102.64 points, extending its gain for a third day with a total growth of 1.8 per cent.
The three-day rallies of the two indices helped them recoup the losses incurred in the first two sessions of the week and end the trading week higher than the previous one.
The VN Index posted a weekly gain of 0.3 per cent, and the HNX Index rose 1.8 per cent week on week.
The three-day rallies on both the local exchanges were attributed to the improvement in the bank stocks, which benefited from a draft circular released by the State Bank of Viet Nam to collect public opinions on the extension of the schedule requiring commercial banks to reduce their maximum ratio of short-term funds used for medium- and long-term loans from 60 per cent to 40 per cent.
The current timeline requires the commercial banks to reduce by 2018 the maximum ratio of short-term funds used for financing medium- and long-term loans, while the draft circular suggests the commercial banks should complete the action by the end of 2019.
The news boosted bank stocks such as MBBank (MBB), Vietcombank (VCB), VPBank (VPB) and Asia Commercial Bank (ACB). These bank stocks advanced between 0.7 per cent and 6.5 per cent in the last three sessions.
Energy stocks were also supported by the rising oil prices during the week. Brent crude rose 1.4 per cent since Monday, pushing up the prices of PetroVietnam Gas (GAS), PetroVietnam Drilling and Well Services (PVD) and PetroVietnam Coating (PVB).
Speculative stocks also performed well, including those of property developer FLC Group (FLC), FLC Faros Construction (ROS), FIT Group JSC (FIT) and Benovas Pharmaceutical Company (DCL).
FLC and FIT increased by one-fifth each during the week, DCL surged nearly 10 per cent and ROS advanced 4.8 per cent.
According to the brokerage firms, the markets would face difficulty in extending their gains this week, as investors would try to take profits from the recent gains in the share prices, such as those of banks and property developers.
BIDV Securities (BSC) wrote in its weekly report that the market rallies received strong support from speculative stocks, while the trading of blue chips was not positive, therefore, the rallies were not stable and strong enough.
In the coming week, if investors continue to keep focusing on lower-priced, speculative stocks, rather than making investment in large-cap ones, they could make large-cap stocks suffer and increase the risk of margin lending for the market, BSC said.
According to Vietnam Investment Securities (IVS), the current market conditions are not attractive enough for investors, as there is a lack of supportive news and information.
It also explained why the daily average trading liquidity last week fell from the previous number, as investors would rather keep their money safe and secure, than disburse it into local stocks.
According to vietstock.vn, more than 232.8 million shares, worth VND3.28 trillion (US$146 million), were traded on both the local bourses in each session.
Last week’s daily average trading numbers were down 2.5 per cent in volume and 22 per cent in value from the previous week.
Ngo The Hien, head of market analysis division at Sai Gon-Ha Noi Securities (SHS), told tinnhanhchungkhoan.vn during a round-table discussion that the VN Index had moved narrowly in the range of 759 and 777 points for the past two weeks.
“There is little chance for the benchmark index to make a jump now, because it is facing strong resistant levels ahead.”
“It will narrowly move between 760 and 780 points in the coming week, and hopefully, it will end August at 780 points,” Hien said.
