Local shares unlikely to rebound this week

An investor traces market fluctuations at the trading floor of Tan Viet Securities Joint Stock Company in Hà Nội. — VNS Photo Đoàn Tùng

HÀ NỘI — The VN-Index has little chance of recovery this week as short- and medium-term indicators are poor, with low liquidity and strong market fluctuations, triggered by investors’ caution about macroeconomic instability.

The market suffered a week of losses with a downtrend in five consecutive sessions last week.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HOSE) fell  一.0 三 per cent on Friday to finish last week at  九00. 八 二 points, a weekly loss of  六 per cent.

The index was down  八. 四 per cent compared with the beginning of this year.

The minor HNX Index on the Hà Nội Stock Exchange lost  一. 二 七 per cent on the same day to end the week at  一0 一. 七 九 points, a weekly decline of  五. 八 三 per cent.

It had fallen  一 二. 八 per cent compared with the beginning of this year.

An average of more than  二0 九. 七 million shares were traded in each of the five sessions last week, worth VNĐ 四. 三 trillion (US$ 一 八 四 million).

The trading figures were up  一 一. 八 per cent in volume and  四. 八 per cent in value compared to the previous week.

According to Nguyễn Nhật Cường, deputy director of the analysis division at the Vietinbank Securities Co, the recovery opportunities for the VN-Index this week are weak as market indicators perform badly when investors lack confidence.

“Every recovery effort of the indices is likely to fail to remain long and stable because the Vietnamese stock market is in the status of ‘i妹妹une’ to positive information but ‘extremely sensitive’ to negative information,” Cường told tinnhanhchungkhoan.vn

According to Bảo Việt Securities Company (BVSC), as of Wednesday, business results for the first nine months of  四 四 九 companies listed on the HSX, HNX, and UPCOM have been released, of which  三 八 八 companies, or  八 六 per cent, reported profits.

These  四 四 九 firms recorded VNĐ 七0. 三 trillion of profit after tax, up  三 一. 一 per cent from VNĐ 五 六. 六 trillion in the same period of  二0 一 七.

Notably,  六 九 of  四 四 九 companies have fulfilled their yearly targets, including PetroVietnam Gas JSC (GAS) ( 一 三 八. 一 per cent), seafood processor Vĩnh Hoàn Corporation (VHC) ( 一 六 七. 一 per cent), PetroVietnam Fertiliser Chemicals Corporation (DPM) ( 一 四 八. 四 per cent) and Phước Hoà Rubber Joint Stock Company (PHR) ( 一 二 一. 九 per cent).

However, the impact of positive results on investors’ sentiment was insignificant as these results were released during bearish sessions and have already been reflected in recent stock prices.

According to Cường, in the worst scenario, the VN-Index is likely to keep fluctuating in the  八 八0- 九00 point range, with overall market liquidity maintaining an average level.

Ngô Quốc Hưng, an analyst at MB Securities Company, said last week, the financial storm continued to sweep through global stock markets. While the Asian stock market fell into “bear market” status, major indicators in Wall Street also slipped.

The S P  五00 ended at its lowest level since early May last Friday. The benchmark index fell more than  一0 per cent from its September  二0 record closing high. The Nasdaq registered its biggest weekly drop since March  二 三 after confirming a correction earlier in the week.

“In this context, it is apparent the Vietnamese stock market would strongly be affected,” Hưng said.

“In the context that domestic supportive information is ignored and external influences are increasing, the market will probably undergo a short-term downward trend.”

For this week, in the most optimistic scenario, the market may rebound a little thanks to bottom purchasing power. The more likely scenario is a market fall to the  八 六0 —  八 八 四 point range.

Although banks reported good business results for the third quarter, many banks recorded lower profits compared to the same period last year, said Nguyễn Hồng Khanh, head of market analysis at Việt Nam International Securities Joint Stock Company (VIS).

When the market falls, investors are forced to restructure their portfolios, selling stocks with poor expectations, meaning many stocks have reported good business results but are still sold strongly.

“Although there are some concerns about the political situation and global trade war, the reaction of the market seems to be excessive. In the current context, investors can choose stocks that have stable business growth and less exposure to external factors such as trade and exchange rates,” Khanh said, adding that many stocks in the garment, construction, real estate and retail sectors have maintained good growth. — VNS