Shares may remain volatile this week as investors keep a cautious stance ahead of OPEC’s meeting, and foreign selling would likely weigh on investor confidence.

Both local stock indexes performed positively in the first three sessions, however, a two-day fall at the end of the week cost them nearly all gains made earlier.

On Friday, the benchmark VN Index on the HCM Stock Exchange lost 0.3 per cent to finish the week at 675.87 points. The southern market index edged up 0.4 per cent from the previous week’s closing level.

The HNX Index on the Ha Noi Stock Exchange inched down 0.2 per cent to end at nearly 81 points, marking a weekly gain of 0.4 per cent.

More than 152.6 million shares were exchanged on average in each session, worth VND2.73 trillion (US$121.4 million). The figures were down 1.7 per cent in trading volume and up 4.6 per cent in trading value compared to the previous week.

Oil prices will be the focus of the market this week as the Organisation of Petroleum Exporting Countries (OPEC) is expected to reach a deal on production cuts at its meeting this week, which could affect the energy sector as one of market’s leading industries, Bao Viet Securities Corp (BVSC) said in a note.

An agreement could be reached at the meeting by OPEC’s members and that deal will be a supporting piece of information for crude prices in the short term, BVSC said.

Oil prices have been volatile lately with a sharp fall on Friday after Saudi Arabia decided to quit talks with non-OPEC producers, including Russia, just days before OPEC meeting on November 30.

US crude West Texas Intermediate slumped 4 per cent on Friday to close the week at $46.06 a barrel, erasing nearly all of a 5.6 per cent gain it had made since November 18.

That signaled a rough trading week ahead for local energy stocks such as PetroVietnam Gas Corp (GAS), PetroVietnam Technical Services Corp (PVS) and PetroVietnam Mud Drilling Corp (PVC).

Net foreign selling would also continue to weigh on investor confidence as investors wait for foreign investment funds to finish reviewing their portfolios at the end of this week and expectations for a US interest rate hike in December would still encourage foreign investors to offload local assets to gain profits and prepare for the listing of large-cap companies, Ngo The Hien, deputy head of market analysis division at Sai Gon-Ha Noi Securities Corp, said.

The State Bank of Viet Nam (SBV) last week continued to keep its daily reference mid-point rate for foreign currency trading in the domestic market at a very high level. The mid-point rate was set at VND22,137 for a dollar on Friday, the highest since it was officially used on January 4.

Foreign investors remained net sellers for the last seven sessions with a total net sell value of VND810 billion last week, which have put pressure on local stocks and keep investors worried about the outflow of foreign capital from the market.

The foreign selling activity could go on, at least until the ETFs finish reviewing their portfolios, Tran Xuan Bach, senior analyst at BVSC, said. He added that expectations for a US rate hike in December could increase the outflow of foreign capital from Vietnamese shares and it (the rate hike) will affect the local market in a negative way before and after the rates are increased.

“When the US central bank raised its lending rates for the first time in nearly a decade in December 2015, foreign investors recorded a net sell value of $200 million between November 2015 and February 2016.” — VNS