Experts warn of correction in trading this week

Dung Quat Oil Refinery operated by Binh Son Refining and Petrochemical (BSR). BSR lost 5.6 per cent last week. - VNA/VNS Photo Huy Hung

The benchmark VN-Index on the Ho Chi Minh Stock Exchange gained 0.22 per cent to end Friday's trading session at 1,166.78 points.

It had lost 2.3 per cent last week.

An average of 810.6 million shares were traded on the southern exchange during each session last week, worth VND17.4 trillion (US$754.1 million).

According to Mirae Asset Securities Co, the VN-Index suffered a strong decline session on Tuesday last week after the index hit its historic peak of 1,200 points.

“The recovery in the next three sessions was just due to short-term bottom purchases. The risk of further decline of the VN-Index still exists due to the profit-taking exercises at low prices,” the company said.

Phu Hung Securities Joint Stock Company (PHS) said that the market closed the last session of last week with fluctuations around the reference level.

“On Friday, efforts to push up the market in the morning session could not sustain until the end of the afternoon as demand at high prices was weakened. There was also a pressure from foreign investors' net selling,” the company said.

“In the mid- and long-term, the index has a chance to surpass the historic peak of 1,200 points. However, technical indicators on the daily chart showed that the three-session recovery span after the massive sell-out session tended to end.

“In a negative case, the index needs another drop to challenge the sentimental level of 1,100 points again, before it can return to the main recovering trend,” the company said.

"In general, the market may soon be under pressure. Therefore, investors should maintain a portfolio proportion at a balanced level and wait until the end of correction phase to re-join the market,” it said.

Regarding market movements, the VN-Index had the first week of decline last week after 11 consecutive weeks of increasing. VN-Index had two declining sessions at the beginning of the week; in which, on the 3rd session on January 19, the VN-Index had a session fall of nearly 61 points.

VN-Index declined in the first two sessions of last week, there were times when the index hit its lowest level at 1,098 points, down more than 100 points from the peak of 1,200. Then the bottom catching demand appeared to help VN-Index recover in the remaining three sessions. Meanwhile, the HNX-Index increased strongly by 14.65 points to 240.12 points.

According to statistics of Saigon-Hanoi Securities Joint Stock Company (SHS), banking stocks fell the most last week with Vietcombank (VCB) down 0.2 per cent, VPBank (VPB) declining 2 per cent, Military Bank (MBB) dropping 4.3 per cent, Vietinbank (CTG) losing 4.8 per cent, Asia Commercial Bank (ACB) down 5.3 per cent, Bank for Investment and Development of Vietnam (BID) falling 7.4 per cent, Saigon-Hanoi Bank (SHB) down 9.4 per cent.

Oil and gas group also suffered, such as Vietnam National Petroleum Group (PLX), down 3 per cent, Binh Son Refining and Petrochemical (BSR) falling 5.6 per cent, PetroVietnam Oil Corporation (OIL), dropping 6.3 per cent, PetroVietnam Drilling & Well Service Corporation (PVD), losing 6.6 per cent, PetroVietnam Technical Services Corporation (PVS), down 7.9 per cent, PetroVietnam Construction Corporation (PVC), down 9.6 per cent, PetroVietnam Coating Corporation (PVB), declining 10.4 per cent.

The remaining groups were also under pressure such as pharmaceuticals and healthcare fell 2.9 per cent, consumer goods 2.4 per cent, construction materials 1.1 per cent, industrial 0.9 per cent, services consumption down 0.7 per cent and finance 0.5 per cent.

Foreign investors net sold 8.7 million shares last week, equivalent to a net selling value of VND534 billion.

According to experts from SHS, the market failed at an important resistance around 1,200 points for the second week in a row and this was the reason why the selling pressure increased, causing the market to correct to below 1,100 points last week.

According to Bao Viet Securities Co, the market expects some flourishing movements in the next trading sessions after the futures expiration event in January.

“VN-Index is likely to challenge the old resistance zone around 1,200 points in the short-term. However, the market’s recovery trend seems to slow down with interlaced corrections in the next sessions.

“Stocks will have a clearer differentiation, following the fourth-quarter business results of listed companies. Besides, investment funds strengthen the portfolio restructuring according to the indexes VN30, VNFINLEAD by end-January.

“This shall create some volatilities for the stocks in the index baskets. The stock exposure should be increased to 40 per cent-60 per cent of the total investment. Investors should take advantage of the market’s corrections to increase the stock proportion,” the company said.