Shares likely to maintain recovery span, but rising supply may pressure indices

Tuesday, Sep 05, 2023 02:46

Employees of tech giant FPT (FPT). Investors should limit the use of margin, focusing on stocks with growth potential in the next two quarters such as securities and technology. — Photo FPT

The market is likely to extend gains after the holiday, but the rising supply is likely to put great pressure on the market when the VN-Index approaches the resistance area of 1,240 points, said brokerages.

“The market continued to extend the recovery span and penetrated deeply into the previous distribution area, the range of 1,210-1,240 points of the VN-Index. With the recovering inertia remaining, the market is expected to maintain the possibility of gaining after the holiday, but it is likely that the supply will increase and put considerable pressure when the market approaches the resistance area of 1,240 points,” said Việt Dragon Securities Co (VDSC).

“Therefore, investors need to observe supply and demand movements and assess the market status. Temporarily, it is still advisable to consider the possibility of the market's recovery to take profits or reduce the weight of stocks that have increased rapidly to the resistance zone or have shown signs of weakening from the resistance zone,” it said.

VN-Index gained 0.9 per cent last Thursday, closing at 1,224.05 points.

Liquidity increased slightly, with 887.1 million shares matched on the HCM Stock Exchange (HoSE).

“The liquidity, although increased, was quite low compared to the previous session, showing that cash flow was still cautious when the market rallied, but the temporary supply did not put much pressure on the market,” said VDSC.

The VN30-Index gained 0.73 per cent, closing at 1,234.53 points. Among the group, there were 23 stocks that closed in green, like HDBank (HDB) rising 3.1 per cent, Masan Group (MSN) gaining 2.4 per cent, and Vincom Retail (VRE) going up 2 per cent.

In contrast, there were only three losers, namely Sabeco (SAB) losing 1.1 per cent, PetroVietnam Gas JSC (GAS) dropping 0.7 per cent and SSI Securities Inc (SSI) down 0.3 per cent. The green colour continued to be maintained on the market with the number of gainers dominating.

At the same time, many industry groups closed in the green. The Construction-Building Materials group and the Steel group had exciting movements right from the beginning of the session, followed by the rise of Textile and Garment, Transportation, Warehousing and Chemicals.

The market is expected to continue its upward trend in the near future, according to Trần Đức Anh, Director of Securities Analysis KBSV, given a few positive impact factors.

“Short-term correction does not affect the market trend in the medium and long term. The index's gaining momentum is still being supported by factors such as the hopes that interest rates will continue to fall and the signs of economic recovery will be clearer in the second half of the year,” he said.

Despite his positive assessment of the market trend, he said that a correction may still appear, especially after the market has increased quite strongly and the current decline remains insignificant. However, the adjustment period is an opportunity for investors to increase the proportion of stocks for medium and long-term goals.

At this time, investors should limit the use of margin, focusing on stocks with growth potential in the next two quarters, such as securities and technology.

At the end of the trading session on Thursday, the VN-Index reached 1,224.05 points, up 0.95 per cent compared to the reference mark and 21.54 per cent higher compared to the beginning of this year. Statistics from IndexQ showed that VN-Index ranked in the top 12 of the world's most strongly increasing stock indexes.

The positive performance of the stock index was partly thanks to the cash flow from domestic individual investors. Data from the Vietnam Securities Depository (VSD) showed that in July alone, individual investors opened 151,000 new securities accounts, an increase of more than 3 per cent compared to the previous month (146,000 accounts) and this was the highest monthly level in the past year.

Transactions of foreign investors also tend to be more positive as the net selling momentum has begun to shrink. Specifically, foreign investors in July 2023 alone sold a net of VNĐ24 billion, marking the 4th consecutive month of net selling, but this level was much lower than the figure of VNĐ269 billion in June, 2023.

Another support for the market's upward momentum is the recovery in business results of listed companies. According to estimates of VnDirect, the net profit in the second quarter of 2023 of companies listed on three exchanges (HoSE, HNX, UPCOM) decreased by 12.9 per cent over the same period last year, lower than the decrease rate of 19.3 per cent recorded in the first quarter of 2023.

The positive movement of VN-Index was also boosted by the expectation of Việt Nam's macro-economy recovery. VNDirect's analysis department forecasts that Việt Nam's GDP in the second half of 2023 will grow by 7.1 per cent, thereby increasing the growth rate of the whole year 2023 to 5.5 per cent. Việt Nam's economy will maintain its recovery momentum in 2024 with GDP growth forecast at 6.9 per cent. — VNS

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