Illustrative image (Photo: VNA) Hanoi (VNA) - Shares are expected to decline further this week as investorsseek profits from a 10-year high, but the decline will not be heavy as foreigninvestments and first-quarter performances will boost investor confidence inlisted companies.
Vietnam’sbenchmark VN-Index on the HCM Stock Exchange edged down 0.2 percent to finish at722.31 points on March 31. The major index gained total 0.7 percent in theprevious two sessions.
TheHNX-Index on the Hanoi Stock Exchange lost 0.3 percent to close at 90.82 pointson March 31. The northern market index retreated from a two-day increase of 0.6percent.
TheMarch 31’s falls ended a sideway weekly move for the two local exchangescompared to the previous week’s closing level of 722.14 points for the VN-Indexand 91.37 points for the HNX-Index.
Markettrading liquidity declined from the previous week, with an average of more than258.4 million shares being traded in each session, worth 4.43 trillion VND (194.38million USD).
TheVN-Index had mainly struggled to stay in the range of 715-720 points in March,according to Chau Thien Truc Quynh, head of the brokerage division at VietCapital Securities Company.
“Asthe benchmark index met strong resistance at that range, the signal ofshort-term correction has appeared, and the stock market will decline in thenext two or three weeks.”
Theshort-term support level for the VN-Index is 717-722 points, for the HNX-Index90.5 point and the stock indices will test these levels in the first tradingdays of this week, she added.
However,the stock market is still an attractive channel for investors, Quynh said. Atthe end of the first quarter, the average trading value on the two localexchanges was 3.56 trillion VND in each session, an increase of 27 percentcompared to last year’s same period.
Stockswill correct on a technical basis in the next two weeks rather than decliningsharply, said Phan Dung Khanh, a senior manager at Maybank Kim Eng SecuritiesCompany.
Thestock market will continue to attract investment as macroeconomic conditionsare positive, interest rates have been reduced and other assets like gold andforeign currencies become less attractive, he said.
Domesticand foreign investment has remained strong, spreading around all sectors in themarket, Khanh added. Foreign investors last week recorded a net buy value of 855billion VND, 12 percent lower than the previous week’s figure.
Inaddition, listed companies, especially large-cap ones, have released theirearnings reports for the first quarter, which have been better than expectedand will boost investor confidence, he said.
Accordingto analysts, the sectors that could be attractive to investors this weekinclude steel, banks and construction and property firms.
Steelproducers such as Hoa Phat Group (HPG) and Hoa Sen Group (HSG) will benefitfrom the latest decision of the industry and trade ministry regulatinganti-dumping tax on imported steel products from China and the Republic ofKorea. The new decision will take effect on April 13 and be valid in the nextfive years, promising to boost performance of local steelmakers.
Inthe banking sector, Sacombank (STB) will be the centre of attention overspeculations on the bank’s restructuring plan. Vietnam’s property giant NovaGroup has proposed to the central bank to purchase 20 percent of Sacombank’scapital to participate in the restructuring of the HCM City-based bank.-VNA
VNA
