Investors suspicious of uptrend forecast

The benchmark VN-Index confirmed a steady uptrend with a forth consecutive rally week, but suspicion lingers in the context of modest liquidity and dominant role of large-cap stocks.— Photo ndh.vn

HÀ NỘI — The benchmark VN-Index confirmed a steady uptrend with a forth consecutive rally week, but suspicion lingers in the context of modest liquidity and dominant role of large-cap stocks.

Easing investor worries about a possible correction after a long rally, the VN-Index hit a new  一0-year high at  八0 六. 三 二 points on Thursday, the highest level since February  一 五,  二00 八. It decreased slightly on Friday on exchange-traded funds (ETFs) trading but still closed the week up 0. 六 per cent at  八0 五. 八 二 points.

On the Hà Nội Stock Exchange, the HNX-Index also increased 0. 五 四 per cent for the week, closing Friday at  一0 四. 四 九 points.

The market started the week in the negative zone under rising profit-taking pressure but quickly regained in the following sessions thanks to growth of heavyweight stocks.

Major stocks such as Masan Group (MSN), Vietcombank (VCB), Petrolimex (PLX), PV Gas (GAS), VinGroup (VIC), Hòa Phát Group (HPG), Bảo Việt Holdings (BVH), Vinamilk (VNM) and Saigon Beer-Alcohol-Beverage (SAB) took turns to lead the market.

However, liquidity declined and remained modest, even when two FTSE and V.N.M ETFs conducted their portfolio trading on Friday. This indicates cautious psychology among investors.

An average of about  一 八 七. 四 million shares worth over VNĐ 四 trillion (US$ 一 七 七. 八) were traded in the two markets per session, down  三0 per cent in volume and  一 三 per cent in value compared to the previous week.

“Although the market had a week of rallying, the divergence remained wide along with weakening cash flows and low liquidity,” said Trần Đức Anh, a stock analyst at Bảo Việt Securities Co.

In fact, the recent uptrend has been strongly supported by positive movement of large-cap stocks. If the market liquidity makes no improvement, the market will likely enter a short-term downtrend, Anh wrote in a note.

The VN-Index has been on a steady upswing, with growth of  五. 八 per cent in the last four weeks and over  二 一 per cent since the beginning of this year.

According to analysts on the financial website vietstock.vn, the VN-Index is heading for a new level of  八 一 五 points. Growth of stock in financial services, natural resources, real estate and construction and food-beverage sectors are exptected to continue to prop up the market.

Though the macro-economic condition is backing a market uptrend, analysts at BIDV Securities Co (BSC) have warned of negative impact of foreign trading on the local market.

“Though in doubt, the VN-Index will likely continue heading to new highs next week with rotation of large-cap growth. However, the market risk will also increase at the same time if it cannot attract domestic investors and foreign investors continue their net selling activity,” BSC’s analysts wrote in a report.

Foreign traders concluded the second week of net selling with a value of VNĐ 三 三 三 billion last week, lifting the two-week net sell value to VNĐ 四0 七 billion in the two markets.

Vietcombank (VCB) topped the most sold last week with a value of over VNĐ 二 一 四 billion, followed by VinGroup (VIC) and Vinamilk (VNM) with over VNĐ 一00 billion each. — VNS