Shares to stay in correction phase this week

Inside a factory of steel company Hoa Phat Group (HPG). HPG was down 3.5 per cent last week. — VNA/VNS Photo Duc Dung

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index lost 2.31 per cent, to end Friday at 1,329.26 points.

The southern market index had lost 2.75 per cent last week.

An average of 541 million shares were traded on the southern exchange during each session last week, worth VND15.6 billion (US$680 million).

The market failed to maintain the recovery span from the previous session and turned down. In recent times, the market has had opposite ups and downs due to the low liquidity in the market, said Viet Dragon Securities Co.

“It also showed that cash flow is cautious and faces some potential risks.

“With the absence of supportive cash flow and stocks that could stabilise the market, the market was under downward pressure at the end of the session.

“With the current state of imbalance, VN-Index will need to retest the area of 1,315 points in the next session. Market movements are currently unstable and potentially risky, so investors need to slow down and limit new purchases until the market has a good enough support signal and consider keeping the portfolio at a safe level,” the company said.

MB Securities Joint Stock Company (MBS) said that the drop in the market at the end of last week did not surprise investors, as investors had cautiously followed developments on tensions between Russia and Ukraine, at the same time bracing for US Federal Reserve (Fed) raising interest rates.

Notably in the last session of last week, in addition to the low liquidity, the decrease in the market in the second half of the afternoon session was attributed to the decline of speculative stocks that were sold strongly.

This made the VN-Index unable to keep the support level of 1,330 points and the index is expected to retest last week's short-term bottom at 1,260 points, MBS said.

"Investors should stay cautious when the market's volatility is increasing, lowering the margin ratio to a safe level", MBS recommended.

SSI Securities Joint Stock Company stated that, with the current decreasing inertia, it is likely that the VN-Index will continue to retest the next support zone at 1,320 - 1,300 points. "In case the index forms and completes the double bottom pattern in the coming sessions, investors can start increasing the proportion of stocks again," recommended SSI.

Construction materials stocks had the biggest drop in the past week with steel stocks like Hoa Phat Group (HPG) down 3.5 per cent, Hoa Sen Group (HSG) down 8.1 per cent, Nam Kim Group (NKG) down 7.6 per cent. Chemical stocks such as Duc Giang Chemicals Group JSC (DGC) down 4.1 per cent, Petrovietnam Fertiliser & Chemicals Corporation (DPM) down 5.5 per cent and Petro Viet Nam Ca Mau Fertiliser JSC (DCM) down 7.4 per cent.

They were followed by the oil and gas and information technology sectors. Typical losers were PetroVietnam Technical Services Corporation (PVS), down 1.6 per cent, PV Oil (OIL) declined 2.2 per cent, PetroVietnam Construction Corporation (PVC) was down 4.5 per cent, Viet Nam National Petroleum Group (PLX) lost 4.6 per cent, Petrochemical and Bio-Fuel JSC (PVB) moved down 4.9 per cent, PetroVietnam Drilling and Well Services Corporation (PVD) lost 5.9 per cent.

In the information technology industry, FPT Corporation (FPT) decreased by 4.6 per cent, CMC Group (CMG) decreased 2.5 per cent.

The pillar banking industry also decreased, creating correcting pressure on the market, such as Vietcombank (VCB) down 1.9 per cent, Vietinbank (CTG) down 2.7 per cent, Saigon-Hanoi Bank (SHB) down 4.9 per cent, Asia Commercial Bank (ACB) down 5.2 per cent, Techcombank (TCB) down 5.7 per cent, Military Bank (MBB) down 6 per cent and VPBank (VPB) down 6.9 per cent.

Retail stocks like Mobile World Group (MWG) fell 1.7 per cent, FPT Retail (FRT) fell 9.3 per cent, Digiworld (DGW) lost 10.4 per cent.

The remaining sectors all saw a relatively strong decline, including industry, consumer services, finance, pharmaceuticals and healthcare, and consumer goods.