Volatile week ahead on earnings

Investors monitor stock transactions on the trading floor of the Artex Securities Company in Ha Noi. - Photo tbck.vn

Main stock indices declined last week, with the VN-Index on the HCM Stock Exchange being down 0.3 per cent for the entire week, standing at 684.8 points, while the HNX-Index on the Ha Noi Stock Exchange closed down 1.5 per cent at 84.2 points.

Liquidity was mixed on the two exchanges.

The daily trading volume on the HCM City's exchange reached 130.5 million shares, valued at nearly VND2.5 trillion (US$112 million) per session, down over 9 per cent in both volume and value compared to the previous week's figures.

However, volume on the Ha Noi's bourse was up 10.7 per cent over the previous week, averaging 45.5 million shares, worth VND449.4 billion per session.

Continuous releases on third-quarter earnings of companies and rising oil prices in the world markets could not help the VN-Index surpass the short-term peak of 690 points, when many large-cap stocks lost momentum under profit-taking selling pressure as the index nears the peak.

Highest market valued stocks, including insurer Bao Viet Holdings (BVH), private equity firm Masan Group (MSN), Vietcombank (VCB), PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD) and dairy giant Vinamilk (VNM), recorded negative performances.

"This is the fourth trading week that the VN-Index has failed to conquer the 690 points landmark, and investors became impatient and increased selling in the weekend session," analysts at BIDV Securities Company wrote in a report.

Meanwhile, cash flows shifted from low valued stocks to those which posted positive earnings results, they said, and forecast that this trend would likely continue this week.

Some 316 companies on the two exchanges have reported their third-quarter earnings, according to preliminary statistics compiled by BIDV Securities Company. However, total values of net profits fell 17 per cent from the same period last year, mainly due to strong declines in profits of PV Gas and PetroVietnam Fertiliser & Chemicals Corporation (DPM).

PV Gas earned net profits of VND986 billion in the past three months, down 60 per cent from the same period last year, while net profits of PetroVietnam's fertiliser company also dropped 50 per cent year-on-year, reaching only VND210 billion.

Stock prices of GAS slipped 2.5 per cent for the week and DPM inched down just 0.4 per cent.

On the other end of the spectrum, construction, steel-making and seafood processing companies performed well. Stocks of these companies, including Hoa Phat Group (HPG), Hoa Sen Group (HPG), Hung Vuong Joint Stock Corporation and Ha Tien 1 Cement Joint Stock Company (HT1), increased 3 per cent to 11 per cent.

Almost 400 companies will publish their earnings reports in the coming weeks, which are expected to affect the VN-Index.

"Blue chips with unannounced solid third-quarter earnings and oil-gas stocks (if oil prices surpass the peak at $52 per barrel) are expected to support the VN-Index to surpass the peak of 690 points," said Tran Hoang Yen, an analyst at Bao Viet Securities Co.

Foreign investors shifted from being net buyers in the previous week to net sellers this week, when selling out in four of five trading sessions, for a value of nearly VND94 billion. They bought shares for a total net buy value of VND392 billion in the previous week.