Investors at a Saigon Securities Inc exchange floor. The benchmark VN Index is expected to reach 615 points this week. — VNS Photo Doan Tung

HA NOI (Biz Hub) — Vietnamese shares may extend their gains this week as smaller speculative stocks such as property firms become more attractive amid mixed results from large-cap stocks, brokerage firms forecast.

Local property firms such as FLC Group (FLC) surged 8.6 per cent last week and Tan Tao Investment Industrial JSC (ITA) jumped 4.8 per cent on expectations the property market will strengthen ahead of the Tet holiday in February.

"However, such gains will not ensure a long-term improvement for the market because the market will still depend much on large-cap shares," Sai Gon-Ha Noi Securities Corporation said in a report.

Boosting investor optimism, analysts expect the foreign exchange market will likely be stable from now to the end of this year as the US central bank will likely decide to slowly raise its interest rates.

Both local exchanges rose on Friday. The benchmark VN Index on the HCM Stock Exchange and the HNX Index on the Ha Noi Stock Exchange inched up 0.4 per cent each to close at 604.46 points and 81.59 points, respectively.

However, the two local indices continued to be mixed after one week. The VN Index dropped 1.1 per cent and the HNX Index was slightly up.

"The VN Index will have a chance to test the mark of 610 to 615 points or else, it may fall back to the mark of 595 points," Sai Gon-Ha Noi Securities said.

Last week, banks, fishery producers, and food and beverage companies were among the sectors that recorded the strongest losses.

The banking sector index fell 1.6 per cent after the terror attacks happened in Paris, raising concerns that investors could sell their assets in risky markets such as emerging markets and move into the safety of the dollar-dominated investments.

In the domestic banking market, the central bank asked local banks not to raise lending interest rates until after the Tet holidays to avoid destabilising market prices. That could reduce bank earnings in the next few months.

The biggest banks such as the Bank for Investment and Development of Vietnam (BID) managed to end flat, Vietcombank (VCB) fell 1.1 per cent and Vietinbank (CTG) dropped 3.4 per cent.

The fishery industry index lost 3 per cent as some US politicians expressed little support for the finalisation of the Trans Pacific Partnership (TPP), an international trade agreement that affects 12 countries, including Viet Nam, the US and Japan.

The protest could prevent membership countries from finalising the TPP until the end of next year as the US politicians wanted to hold it off until after the result of the president election.

The biggest companies in this sector such as Hung Vuong JSC (HVG) dropped 7.2 per cent from the previous week while Ben Tre Aquaproduct Import & Export JSC (ABT) managed to end flat.

The food and beverage companies index dropped 2.7 per cent, led by the fall of Vinamilk, and had the most effects on the market.

Vinamilk dropped 4.4 per cent last week as investors sought to sell it after it had risen more than 10 per cent recently.

On the positive side, the national stock market received strong support from the plastics production sector and the real-estate property trading sector, which gained 3.6 per cent and 0.1 per cent, respectively.

Plastics producers benefited from the fall of the US benchmark crude West Texas Intermediate (WTI) which inched down 0.9 per cent to $40.39 a barrel, helping local plastic companies reduce production costs for using crude oil as an input material.

Among the biggest plastics stocks, Binh Minh Plastics JSC (BMP) was up 2.3 per cent, Tien Phong Plastic JSC (NTP) jumped 5.9 per cent and Rang Dong Plastic JSC (RDP) surged 12.3 per cent from the previous week.

Both local exchanges traded a daily volume of 189.4 million shares and daily value of VND2.95 trillion ($131 million), an increase of 11 per cent in volume and 8.7 per cent in value from the previous week. — VNS