Share to retreat amid weak cash inflow

Monday, May 08, 2023 07:04

Two investors at the trading floor of Tan Viet Securities Inc (TVSI). — VNA/VNS Photo

Shares are forecast to correct as selling pressure at the resistance area of 1,040-1,045 points will continue to suppress the market in the next sessions, said analysts.

On the Ho Chi Minh Stock Exchange, the VN-Index inched down 0.03 per cent to close the day at 1,040.31 points.

An average of 575 million shares were traded on the southern bourse during each session last week, worth VND10 trillion (US$426.5 million).

The market struggled around 1,040 points on Friday. However, when the index attempted to regain the green and back above 1,040 points, selling force continued to put pressure on the general market's recovery, said Xuan Vu, an analyst at Viet Dragon Securities Co.

“With this development, it is expected that selling force at the resistance area of 1,040-1,045 points will likely continue to suppress and cause VN-Index to gradually retreat to the support area around 1,030 points in the next few sessions. Therefore, investors still need to be cautious, keep the portfolio weight at a reasonable level and avoid overbought this week,” Vu said.

The market continued to struggle around 1,040 points of the VN-Index. Supply continued to exert pressure when the market recovered, while the cash inflow was still quite cautious. It was expected that selling pressure at the resistance area of 1,040-1,045 points would continue to suppress the market in the next sessions. Therefore, investors needed to be cautious, keep the portfolio proportion at a reasonable level and avoid overbought status, the analyst said.

In the context that the market had entered a “quiet” period in terms of supporting information from within the country, coupled with the downward pressure coming from the US market, investors might be cautious and market liquidity might continue to remain low, challenging the market's efforts to gain in May, said Bach Tran, analyst at Bao Viet Securities Co.

Trading activities might be considered if VN-Index corrects to the support zone of 1,035-1,038 points, he said.

According to VNDIRECT Securities Co, Viet Nam's stock market started the first trading week after the holiday of April 30 - May 1 in a cautious state, in the context of the US Federal Reserve (Fed) raising interest rates by 25 basis points at the meeting in early May. The US is facing the risk of a public debt crisis and the US banking system is unstable.

Domestically, the less positive first-quarter business results reporting season for the first quarter of 2023 was forecast, but this still exerted certain pressure on the market. According to statistics, the profit of the whole market decreased by about 17.5 per cent over the same period last year.

The decline in profits pulled the market's valuation slightly, the price-to-earnings (P/E) ratio of the VN-Index is currently at 12.3 times, which is a reasonable level. The current 12-month term deposit interest rate is about 7.5 per cent.

In the context that the international market is still volatile and the market valuation is not really attractive, it is likely that the VN-Index will continue its sideways trend or adjust slightly in the first half of May.

Saigon - Hanoi Securities Joint Stock Company (SHS) also said that in the short term, VN-Index was to be in a sideways state in a stable range, not forming a specific trend yet.

The market had lost its bullish channel and was in an accumulation state. With the current developments, although the risk in this period was not high, there were not many opportunities for short-term profit, it said.

The market last week continued to witness strong divergence among stocks in the same industry. While shares of banks such as Asia Commercial Bank (ACB) increased by 1.9 per cent and HDBank (HDB) rose by 1.3 per cent, some other banks adjusted such as Vietcombank (VCB) down 0.8 per cent, Vpbank (VPB) down 2.3 per cent and Techcombank (TCB) down 2.7 per cent.

The real estate industry also diverged. Large-cap stocks falling included Vinhomes (VHM) down 1 per cent, Vingroup (VIC) losing 2.7 per cent, Novaland (NVL) dropping 5.3 per cent. Mid-cap stocks had impressive gains such as Bamboo Capital Group Joint Stock Company (BCG) up 4.7 per cent and DIG Group (DIG) up 1.9 per cent.

On the Ha Noi Stock Exchange (HNX), the HNX-Index lost 0.17 per cent, to close Friday at 207.80 points.

An average of 75 million shares were traded on the northern exchange, worth nearly VND1 trillion. — VNS

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