As corporate earnings are predicted to rise in the second quarter and first six months of the year, investors may return to the Vietnamese stock markets and lift local shares.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange gained slightly 0.24 per cent to close Friday at 975.34 points, making a weekly increase of 2.67 per cent.

On the Ha Noi Stock Exchange, the HNX-Index rose total 0.9 per cent last week to end at 104.38 points.

The Vietnamese stock market recorded the biggest weekly growth last week since February 2019 as investors hunted for companies’ stocks that may report higher quarterly earnings.

Bank stocks made strong gains last week after recent reports had shown listed banks would perform steadily in the first half of the year.

According to KB Vietnam Securities Co, Vietcombank, Military Bank (MB), Asia Commercial Bank (ACB) and Vietnam International Bank (VIB) are among banks that will meet investors’ expectations.

Last week, shares of Vietcombank, MB, ACB and VIB advanced between 1 per cent and 4.3 per cent in total.

Other bank stocks that also progressed included Vietinbank (CTG), Bank for Investment and Development of Vietnam (BID), and Techcombank (TCB).

Banks will record stable growth in earnings in the first half and the whole year though there are some pressures with lending rates, Vietcombank Securities Co (VCBS) said in a note.

There will be strong differentiation among banks as some of them will find it hard to improve the quality of assets and net interest margin (NIM), VCBS said.

But higher safety standards set for the banking sector will push local banks to achieve real-quality growth, the stock-broking unit of Vietcombank added.

Other sectors also in focus include retail, logistics, transportation, food and beverage, and utilities.

Digital retailers FPT Retail (FRT) and Mobile World Investment (MWG), PetroVietnam Transportation (PVT), dairy producer Vinamilk (VNM) and food and beverage firm Masan (MSN) are the strongest companies in those sectors.

Shares of ‘Vin’ companies – Vingroup, Vincom Retail and Vinhomes – are also forecast to support the market’s short-term uptrend. Those stocks gained between 0.9 per cent and 8.4 per cent last week.

In addition to earnings season, investors’ confidence will also be bolstered by the continuing US-China trade talks this week as well as expectations for the Fed to cut interest rates at the end of the month.

“Investors have regained some confidence,” Le Duc Khanh, a senior manager at PetroVietnam Securities JSC (PSI), told tinnhanhchungkhoan.vn.

“Quarterly earnings reports are clearly a factor driving market sentiment up,” he said. “Many listed companies have performed well since the beginning of the year and their share prices will continue rising.”

But investors should not count too much on the development of the international markets, analysts said.

International news may overshadow corporate earnings if the events go against market expectations, they said.

An important note is that last week’s trading liquidity barely improved as cash flow focused on some key stocks and did not spread to the whole market, Sai Gon-Ha Noi Securities (SHS) said.

An average of more than 177.3 million shares was traded in each session of last week, worth VND4 trillion (US$172 million).

The figures were lower than the previous week’s – which were 214.6 million shares in volume and VND4.53 trillion in value.

The decline of trading liquidity – also meaning fewer purchases – made it harder for investors to look for profits even when the market is on an uptrend, SHS said.

The market may continue rising this week and the nearest target for the VN-Index may lie at 990-1,000 points, the company forecast. – VNS