The benchmark VN-Index is heading to the 870-point landmark this week with the support of large-cap stocks experts have predicted, but cautioned a likely correction after a long rally.
On the HCM Stock Exchange, the VN-Index expanded 2.9 per cent last week, closing Friday at 868.21 points. This is the sixth straight week of gains for the VN-Index with cumulative growth of 8.2 per cent since October 2.
Liquidity hit a record high since the establishment of the southern bourse with an average of 195.4 million shares worth over VND8.5 trillion (US$374.5 million) being traded per session.
However, like what happened in the previous weeks, trading focused on large-cap stocks, especially newly-listed Vincom Retail (VRE) and dairy giant Vinamilk (VNM) last week.
Vincom Retail debuted over 1.9 million shares on the HCM Stock Exchange on November 6. With a gain of nearly 27 per cent in the first trading week, the company became the seventh largest company, valued at VND82.4 trillion ($3.63 billion).
Trading on this stock mainly happened through put-through (negotiated) transactions. On November 7 alone, foreign traders bought nearly 410 million VRE shares worth more than VND16.6 trillion while selling 286.8 million shares worth VND10.9 trillion.
According to market analysts, VRE may be the new factor helping the VN-Index continue its gains in the coming trading weeks.
Meanwhile, its parent company VinGroup (VIC) also increased for four consecutive sessions, up 9.6 per cent for the week.
Dairy firm Vinamilk also had four growing sessions last week with gains of 12 per cent. Especially, it hit the ceiling price of 7 per cent growth on Friday thanks to news of the successful auction of 3.33 per cent of capital by the State Capital Investment Corporation on the same day.
Foreign traders paid over VND1 trillion to purchase a net 6.6 million Vinamilk shares on Friday.
According to Sai Gon-Ha Noi Securities JSC (SHS), money flows still concentrated mainly in the large-cap group, helping push up prices of these shares and thereby lifting the VN-Index to new peaks.
However, market divergence continued to happen, causing profit-seeking opportunities to shrink for a large number of investors, SHS analysts wrote in a note.
“In general, the uptrend may continue over the next week but a cautious view in this period is necessary,” they said, predicting the VN-Index can cross the psychological threshold of 870 points.
On the Ha Noi Stock Exchange, the HNX-Index also increased over 1.9 per cent last week, ending Friday at 106.37 points. Without the support of major blue chips, liquidity was modest with about 38 million shares worth VND465 billion being traded per session.
Oil stocks
Energy stocks had positive trades last week when major stocks including PV Gas (GAS), Petrolimex (PLX), PetroVietnam Drilling and Well Services (PVD) and PetroVietnam Technical Services (PVS) gained between 4.5-6.9 per cent each.
Their growth was mainly driven by continuous increases in global oil prices which extended to five consecutive weeks of gains amid fears of instability in the Middle East.
Two major commodities – West Texas Intermediate (WTI) and Brent – rose by more than 2 per cent last week.
According to observers, oil price hikes in recent weeks are due to efforts to cut production of major oil producers.
At the meeting of the Organization of Petroleum Exporting Countries (OPEC) on November 30, producers are expected to extend their expiration agreement to March 2018. Meanwhile, US crude production is expected to rise to 9.2 million barrels a day this year and 10 million barrels a day next year.
Analysts predict positive development in the global oil market will likely support domestic oil stocks in the near future.
Besides the oil sector, banking and rubber stocks also increased substantially last week. Major stocks in these groups saw growth of 4-14 per cent. – VNS