Shares forecast to face correction pressure but opportunities still exist

A client withdraws cash at an ATM of VPBank (VPB). VPB lost 2.1 per cent last week.- Photo courtesy of VPB

The stock market will be closed on Thursday and Friday this week on the occasion of the Independence Day of Viet Nam (September 2), meaning that it will open for trading on only three days from September 30 to September 1.

The VN-Index climbed 0.93 per cent to close Friday at 1,313.20 points.

The index had lost a total of 1.22 per cent last week.

Viet Dragon Securities Joint Stock Company (VDSC) said that although the VN-Index ended last Friday with a strong increase, the market was still in an accumulation phase, after a sharp decline in the previous week.

“More cash flow had returned to the stock market with many stocks continuing to rise strongly, which meant the cash flow was still moving continuously and always looking for investment opportunities,” Viet Dragon said.

"In the current period, investors can hold good stocks or find more opportunities to invest in the short term," it said.

MB Securities Joint Stock Company (MBS) said the VN-Index had a positive recovery session at the end of last week, with the rebound of blue chips beside the rises of small and medium-sized stocks. The 1,290 - 1,300 point zone had become a strong support zone.

Investors could restructure part of their portfolio to the blue-chip group after the cash flow returned to bottom fishing with some stocks reaching the bottom in July, MBS recommended.

SSI Securities Joint Stock Company (SSI) said that the VN-Index would continue to increase this week. However, because it was still in a short-term downtrend, the index would soon face correcting pressure when the VN-Index was heading to the resistance area near 1,340 points.

“The nearest support area for VN-Index is at 1,300-1,292 points,” it said.

Saigon-Hanoi Securities Joint Stock Company (SHS) said from a technical point of view, the VN-Index was still moving in a correcting phase and there was still room for a decrease.

“The market is likely to continue the technical recovery at the beginning of this week, before continuing to correct to lower price ranges. The notable resistance zone is currently in the range of 1,335-1,340 points,” SHS forecast.

“Investors who still have a large proportion of stocks can watch for technical recovery to reduce the proportion. Investors who had taken profits in the short-term portfolios earlier should continue to observe and disburse when the market corrects in a strong support zone in the range of 1,200-1,250 points,” SHS said.

In the context that the COVID-19 pandemic is still spreading and social distancing measures have a negative impact on the economy, the stock market still lacks supportive factors in September, according to Phan Dung Khanh, director of the investment consultancy department at Maybank Kim Eng Securities Co Ltd.

“Even countries that have implemented vaccination campaigns on a large scale and reopened their economies have seen their economies begin to decelerate, supply chains are disrupted, inflation is still accelerating,” he said.

“The macroeconomic indicators of the third quarter are predicted to be pessimistic and even the business results of enterprises are forecast to be lower than the first two quarters of this year. However, there are still groups of industries that benefited from the pandemic,” said Nguyen Hong Khanh, head of market analysis at Viet Nam International Securities Joint Stock Company (VIS).

“Investors often don't focus too much on the third quarter's results but rather more on the whole year's business results,” he said.

“Companies in industries that benefit from the pandemic such as securities, nitrogen fertilisers and logistics will still grow, although the level may slow down a bit compared to the second quarter,” he said.

Last week, banking stocks dropped the most with losers such as Saigon-Hanoi Bank (SHB) down 1.8 per cent, VPbank (VPB) losing 2.1 per cent, Vietcombank (VCB) declining 2.3 per cent, Bank for Investment and Development of Vietnam (BID) down 4.4 per cent, Vietinbank (CTG) losing 4.7 per cent, Techcombank (TCB) falling 4.9 per cent, Asia Commercial Bank (ACB) slumping 5.5 per cent, and Military Bank (MBB) down 6.4 per cent.

They were followed by financial and real estate stocks such as Vingroup (VIC) decreasing by 3 per cent, Vinhomes (VHM) losing by 1.1 per cent, Saigon Securities Inc (SSI) falling 2.1 per cent, and Viet Capital Inc (VCI) declining 3.7 per cent.