Analysts cautious on market movements

Plastic tubes produced by Binh Minh Plastics Joint Stock Company (BMP). BMP declined 5.4 per cent last week.-Photo ongbinhminh.vn

On the Ho Chi Minh Stock Exchange, the VN-Index lost 1.35 per cent to close last Friday at 1,482.00 points.

The index had lost a total of 2.27 per cent last week.

An average of 797 million shares were traded on the southern exchange, worth VND25.9 trillion (US$1.1 billion).

“The lack of demand at the support point caused the market to drop profoundly and return to the struggling zone below 1,500 points.

“The cash flow in this return still hasn't shown any positive signal as the index closed at the lowest price of the session. This indicates that selling pressure is still overwhelming, and this price is not attractive to investors. With this cautious signal, the market is likely for a downturn and retreat to the lower support lines,” said Viet Dragon Securities Co.

“The downtrend is expected to stop when VN-Index returns to the range of 1,455-1,465 points. The retracement level will be lower for VN30 when the close support is at 1,515 points,” said the company.

“Therefore, investors should slow down and consider adjusting a reasonable disbursement in some good stocks with positive accumulation background and attracting cash flow. However, they still should be careful with high-risk stocks,” it said.

Viet Nam Foreign Trade Bank Securities Company Limited (VCBS) said that the bottom-fishing demand in the past week still existed, but it was not strong enough to help the VN-Index go against the general trend in the world. VCBS said cash flow would return to the group of large-cap stocks, which had a rather deep discount after last week.

With such developments, short-term investors can disburse a small proportion into "pillar" stocks leading the market, while medium and long-term investors should still wait until the market price level was more stable, VCBS recommended.

According to Saigon-Hanoi Securities Joint Stock Company (SHS), after three consecutive weeks of gains, the market finally corrected again in the past week.

“A series of negative news appeared on the market, which weakened investor sentiment quickly, leading to a sharp increase in selling pressure, especially in the last two sessions of last week,” the company said.

From a technical perspective, VN-Index had failed the psychological support level of 1,500 points and the technical support level of 1,490 points, causing the uptrend to be weakened. Therefore, VN-Index may continue to correct to the support zone in the range of 1,425-1,450 points this week to find bottom-fishing demand.

Almost all stock sectors went down in the past week. The industrial group dropped the most due to the decline of some pillars such as SCG Construction JSC (SCG) down 2.2 per cent, Viettel Construction Joint Stock Corporation (CTR) losing 2.9 per cent, Binh Minh Plastics Joint Stock Company (BMP) declining 5.4 per cent, and Geleximco (GEX) down 13.4 per cent.

Consumer goods also fell with losers including Sabeco (SAB) down 0.7 per cent, Hanoi Beer Alcohol And Beverage Joint Stock Corporation (BHN) decreasing 2 per cent, and Vinamilk (VNM) down 5.4 per cent.

Bank shares also dropped. Specifically, Sacombank (STB) was down 0.3 per cent, Techcombank (TCB) down 2.9 per cent, Vietinbank (CTG) down 3 per cent, Bank for Investment and Development of Vietnam (BID) down 5.5 per cent, and Sai Gon-Ha Noi Bank (SHB) down 9.5 per cent.

Bui Van Huy, brokerage director of Ho Chi Minh City Securities Company (HSC), said since the beginning of this year, the market has missed two opportunities to make a good breakthrough, which were the period after the Lunar New Year and the beginning of the business earning results season, in early April.

“With such a weakening cash flow, it is necessary to regularly evaluate the factors affecting the market, such as domestic inflation, the Fed’s movements, the yield on US government bonds and conflict in Ukraine."