Lack of good news to slow market growth: analysts

A Vietcombank office. The bank shares gained a total of 3.4 per cent last week.

Vietnam’s benchmark VN-Index on the Ho Chi Minh Stock Exchange fell a total of almost 1.0 per cent in three consecutive days to end last week at 827.03 points.

The benchmark totalled a weekly gain of 1.63 per cent last week.

The VN-Index had increased by a total of 9.55 per cent since May 5 and a total of 26.7 per cent from its three-year low of 659.21 points made on March 24.

The minor HNX-Index on the Ha Noi Stock Exchange dropped total 0.91 per cent to finish last week at 109.02 points.

The last two and three-day declines of both indices suggested the local market will suffer more in the coming week.

Investors kept selling large-cap stocks and pushed several leading companies in the large-cap sector down.

Tech group FPT shares (FPT) tumbled 10.7 per cent last week, aviation firm Vietjet (VJC) lost 5.1 per cent, property trader Vincom Retail (VRE) fell 4.8 per cent, and retailer Mobile World Investment (MWG) were down 2.1 per cent.

The growth of other large-caps such as insurer Bao Viet Holdings (BVH), steel producer Hoa Phat (HPG), Phu Nhuan Jewellery JSC (PNJ), dairy firm Vinamilk (VNM), VPBank (VPB), Vietcombank (VCB) and Military Bank (MBB) slowed down in the last two-three trading days of the week.

“I think the stock market will keep increasing next week but cash flow will be divided into various sectors instead of focusing on the large-caps or leading industries,” Nguyen The Minh, director of market analysis at Yuanta Securities Co, told tinnhanhchungkhoan.vn.

“The last three-day decline may be technical and short-lived. It barely has any impact on the market’s uptrend,” he said.

Agribank Securities Co’s director of analysis and investment Nguyen Anh Khoa said the market is now in the settlement stage and investors are looking for new opportunities.

“It is likely the benchmark VN-Index will fall next week but selling will not be strong,” he said.

“Market boosts will come from purchasing power of domestic investors while foreign investors have net-bought in recent days.”

Foreign investors last week supported the market sentiment as they purchased a net value of total VND2.12 trillion (US$90.1 million).

They net-sold Vietnamese shares for a net value of 2.77 trillion in the week before last week, VND7.4 trillion in April and VND10 trillion in the first quarter of the year.

But good news is drying up, according to securities firms.

“Potential adjustments in 2020 business plans under the impacts of the COVID-19 pandemic and worst-than-expected second-quarter business results may lead to a wide divergence among stock sectors,” Bao Viet Securities Co (BVSC) said in its weekly report.

“The maturity of May futures contracts next week may also cause wide fluctuation,” BVSC said. The VN30 futures last week finished at 766.70 points, 7.25 points lower than its underlying VN30-Index’s close of 773.95 points.

“The gap proves investors believe in a coming market correction,” Sai Gon-Ha Noi Securities (SHS) said in its weekly report.

“Technically, the resistance for the VN-Index now is at 840-point level while the short-term bottom line will be 800 points,” SHS said.