Though Vietnamese shares bounced back strongly in the last two sessions of last week, analysts and brokerage firms remained skeptical that the stock market had actually overcome a difficult period and begun its consolidation.
The benchmark VN Index on the HCMC Stock Exchange finished last week at 909.72 points, marking a two-day increase of 1.85 per cent, but it fell a total of 0.85 per cent after one week.
The HNX Index on the Hanoi Stock Exchange ended Friday at 102.51 points after rallying a total of 4 per cent in two sessions. The northern market index notched weekly growth of 1.8 per cent.
According to analysts, the latest two-day rally did not guarantee short-term growth of the stock market even though some positive signals have appeared in key industries such as banks, securities and real estate.
Manager Dương Văn Chung at MB Securities Company told tinnhanhchungkhoan.vn that most investors and specialists had the same idea that the market had consolidated after it had fallen sharply in the past three months, thus, they thought the market would move in a positive direction this week.
“Based on analysing the market regarding its technical and fundamental factors, I think the latest two-day increase was just a technical recovery and the stock market is not likely to have sustainable growth at the moment,” Chung said.
The benchmark VN Index may rise to a maximum 929 points in the first two sessions this week and then move sideways in the rest of the week, he forecast. “If the VN Index beats the 884-point level on its way down, the market downtrend will continue.”
According to Dương Hoàng Linh, a senior analyst at Sacombank Securities Company, last week’s strong gains were normal as such gains often happen during the downtrend of the stock market after the indices have declined for a long time thanks to depressed investor sentiment.
“It is difficult to hope for positive growth next week as fundamental elements such as cash flow, macroeconomic conditions, global tensions and foreign trading have shown little support for the market’s growth,” he said.
Macroeconomic factors, especially the trade tension between the US and China, would likely damage investor confidence in the stock market, especially domestic ones, Viet Capital Securities Company (VCSC) Head of Brokerage Châu Thiên Trúc Quỳnh said.
“Foreign investors have kept net-selling while domestic investors tend to stand by and take careful watch over the flow of foreign capital. Some of the domestic investors are still worried and pessimistic about the market’s short-term development.”
Trading liquidity remained modest last week with an average of nearly 158.5 million shares being traded in each session, worth VND3.16 trillion (US$140.4 million).
The trading figures were down 18.3 per cent in volume and 27 per cent in value compared to the previous trading week. That indicated investor confidence in local stocks had been declining, according to analysts.
Financial-banking stocks played the important role in driving up the market during the final two sessions of last week.
Bank stocks led to the market’s upward turn, including Vietcombank (VCB), Vietinbank (CTG), Bank for Investment and Development of Vietnam (BID), VPBank (VPB) and MBBank (MBB).
Those bank stocks gained a total of 4.6 per cent, 3.7 per cent, 2.2 per cent, 4 per cent and 3 per cent, respectively.
Analysts have said financial-banking companies, especially banks, may achieve high growth in their earnings for the second quarter and the first six months of the year.
Bank stocks are among the groups of companies that have positive prospects in the short term after some of them reportedly revealed “big” earnings for the second quarter, Quỳnh at VCSC said.
FPT Securities Company (FPTS) said in its report that there had been less negative news from the world’s markets while banks had led the indices up in the last two sessions.
“Friday’s session may be the first signal that reflects investors’ expectations in listed firms’ earnings reports for the first half of 2018. Banks will be in focus next week for investors,” it said.