Hanoi (VNS/VNA) - Investors were very excited after the benchmark VN-Indexhit an almost decade-high last week and forecasts predict it will head to 1,000points this year. However, analysts have warned of a likely correction thisweek after a long rally before the market goes further.

The VN-Indexrecorded the largest weekly gain in the past eight years, picking up over 5 percentlast week. It closed November 24 at 935.57 points, the peak since December 12,2008.

The bullmarket has been steady with the VN-Index climbing nearly 41 percent this year,sending it among the best performing markets in the world.

On the HanoiStock Exchange, the HNX-Index gained over 2.3 percent for the week, ending November24 at 110.83 points. The northern market index has also expanded over 38.3 percentsince the beginning of this year.

Both tradersand analysts were upbeat with the market development when the index increasewas accompanied with better liquidity.

An average of245.4 million shares worth a combined 5.4 trillion VND (roughly 237 million USD)were traded in the two markets, up 10.7 percent in trading volume and 6.5 percentin value compared to the previous week.

Cash flowstill continued to run in the market, focusing on major large caps, includingVinGroup (VIC), Vincom Retail (VRE), Masan Group (MSN), Petrolimex (PLX), PVGas (GAS), Vinamilk (VNM), brewers Sabeco (SAB) and Habeco (BHN), along withbig banks like Vietinbank (CTG) and BIDV (BID).

The biggestgainers were Habeco, up 16.6 percent; Sabeco, up 13.9 percent; Vietinbank, up14 percent; Vincom Retail, up 13.2 percent; and Masan Group, up 10.6 percent.

Though moneyseemed to reduce in the large-cap sector, which slowed down market growthin the weekend session, cash tended to spread to small- and medium-cap stocks.

Many of thisgroup, especially real estate shares, hit the daily limit rise on Friday’strade, including Refrigeration Electrical Engineering Corp (REE) and Dat XanhReal Estate Service & Construction Corp (DXG), Quoc Cuong Gia Lai JSC (QGC)and NBB Investment Co (NBB).

According toTran Duc Anh, a stock analyst at Bao Viet Securities Company, increasedprofit-taking pressure in large-cap stocks triggered high risk of a short-termcorrection for these stocks. However, as cash inflows are also running intomid-cap and penny stocks, a divergence can still be seen this week.

In a note toits clients on November 24, Viet Dragon Securities Co noted as cash flow isstrong, it seemed ready to support the market when a deep correction takesplace.

“This isexactly what happened in the last two sessions. This phenomenon may continue,but investors need to remain cautious and avoid being carried away by themarket excitement, which could lead to unreasonable action,” it said.

The localstock market is backed by strong cash flows from both domestic and foreigninvestors thanks to successful mega deals this month, such as the stock debutof Vincom Retail and heavy investment of Singapore’s Jardine Cycle&Carriagein Vinamilk through share purchase.

These dealshave electrified investor sentiment and the fact that foreign investors werewilling to pay a premium to current valuations is leading a ‘retreating” of thelocal market, Fiachra Mac Cana, managing director at HCM Securities JSC toldBloomberg.

Thederivatives market showed the best expectation of investors, with the futurecontracts due June 2018 reaching 1,036 points, which is 100 points higher thanthe reference index VN30, and contracts due March 2018 at 991 points, 50 pointshigher than the VN30.

According toNguyen Duy Hung, chairman of Saigon Securities Inc, when the market is in ahigh state of excitement, the greed will lead to higher risk.

The marketwill need a necessary correction to return to the balanced state and smartmoney will seek opportunities in good stocks instead of pouring into hot stockswith continuous rises.-VNA