Shares set to grow thanks to upbeat sentiment

Monday, Oct 26, 2020 06:54

A MEATDeli facility run by consumer firm Masan (HoSE: MSN) in HCM City. The company shares gained total 7.5 per cent last week. Photo

Shares are set to move higher this week thanks to upbeat market sentiment and supportive information.

According to MB Securities Joint Stock Company, the market continues to expand in momentum and investors are cheered by the injection of a strong cash flow pouring into leading groups such as banking stocks.

The elimination of losses from the beginning of the year would soothe investors' sentiment, thereby raising market expectations to the psychological threshold of 1,000 points.

Last week, the benchmark VN-Index on the Ho Chi Minh Stock Exchange gained 1.20 per cent to close Friday's trading session at 961.26 points.

The southern index had gained 1.9 per cent last week.

An average of 412.8 million shares were traded during each session on the southern market exchange last week, worth VND8.4 trillion (US$363 million).

The slightly narrowed fluctuation band, positive market breadth and increased liquidity indicated that the positive trading sentiment was likely to continue, said BIDV Securities Co.

The company said the VN-Index might fluctuate in the 960-980 point range in the trading sessions this week.

Last week, MSCI proposed to take Kuwait out of the MSCI Frontier Markets 100 Index. Accordingly, this organisation proposed to gradually reduce the proportion of Kuwaiti securities in five review sessions starting in November 2020 and ending at the review period of November 2021 instead of only one session. The reason for this proposal is to avoid market volatility and to facilitate restructuring since Kuwait's weight in the MSCI Frontier Markets 100 Index is fairly high.

In MSCI’s proposal, the gradual removal of Kuwait stocks from MSCI Frontier Markets 100 Index will take place in the following five review periods: Period 1 – November 2020, Period 2 – February 2021, Period 3 – May 2021, Period 4 – August 2021, and Period 5 – November 2021.

According to Bao Viet Securities Co, the proportion of Vietnamese shares over these five review periods will gradually increase from 12.68 per cent to 15.76 per cent, 19.01 per cent, 22.23 per cent, 25.49 per cent, and 28.78 per cent.

Based on the results announced by MSCI, it is likely that two new stocks will be included in the MSCI Frontier Markets 100 stock basket in the near future, namely Kido Group (KDC) and Phat Dat Real Estate Development JSC (PDR).

However, this was just a proposal from MSCI to consult with market members, not the final decision, said Khieu Trong Huy, a stock analyst at Bao Viet Securities Co.

MSCI will collect market members' opinions until October 30, 2020 and will announce their decision on November 9, 2020.

If this proposal of MSCI is approved and issued, the disbursement in five sessions will make it easier for funds to buy and sell stocks, but on the other hand, it will not create a strong demand at a time for the Vietnamese market, Huy said.

Strongest supporters of the VN-Index last week were Vingroup, rising 6.6 per cent, Vinhomes (VHM), increasing 3.2 per cent, Hoa Sen Group, up 2.3 per cent, Hoa Phat Group, going up 6.2 per cent, Vinamilk (VNM), increasing 2.4 per cent, Masan Group (MSN), up 7.5 per cent, Vietinbank (CTG), gaining 2.1 per cent and Techcombank (TCB), up 6 per cent.

Saigon-Hanoi Securities Co said VN-Index had surpassed the threshold of 950 points, the resistance level before the COVID-19 pandemic.

The only negative point now was that the foreign investors had net sold for the fourth consecutive week with more than VND2.4 trillion on the two exchanges.

SHS forecasts that the VN-Index may continue to rise in a point range from 980 to 990 points this week. — VNS

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