Despite the effects of global market volatility, Vietnamese stock market is forecast to remain positive this week thanks to improved liquidity and the return of cash flow together with positive listed companies’ earnings prospects.

The benchmark VN-Index on the HCM Stock Exchange gained 0.63 per cent to close Friday at 959.60 points, totaling a two-day increase of 0.7 per cent.

The HNX Index on the Ha Noi Stock Exchange added 0.56 per cent to end Friday at 106.24 points. It has risen a total of 0.94 per cent in the last two sessions.

The increases of the last two days helped the VN-Index finish 2.57 per cent higher and the HNX Index increased 0.52 per cent on a weekly basis.

An average of more than 249 million shares, worth VND4 trillion, was traded in each session last week.

According to market expert Ngo Quoc Hung at MB Securities Joint Stock Company (MBS), despite the impact from the volatility of stock markets in the region, the hike of exchange rate and net selling activities of foreign investors, Vietnamese stock market continued to have a good trading week with VN-Index rising on a weekly basis of 2.57 per cent, very close to the threshold of 960 points.

“With this increase, the VN-Index was ranked the second in the list of the most powerful indexes in the world last week, according to the website indexq.org,” Hung said.

He added that during the last seven sessions last week was the third consecutive week that the stock market recorded an increase and it was also the best-performing week of VN-Index over the past four months.

Notably, the trading value has strongly improved, from an average of VND3 trillion per session to VNĐ3.7 trillion per session, even to VND4.3 trillion per session. The recovery of domestic cash flow offset the net sale of foreigners, which mainly focused on real estate developer Vingroup (VIC), steel maker Hoa Phat Group (HPG) and dairy firm Vinamilk (VNM).

Technically, the VN-Index is moving towards the important threshold of 960 points. If the market still maintains, the VN-Index will continue to conquer this threshold before advancing to the new range points of 975-980, Hung said.

However, investors should be cautious as profit-taking pressure will increase as the market had been rising for three consecutive weeks, shaking sessions will thus be inevitable, he said.

Nguyen Hong Khanh, head of market analysis at Viet Nam International Securities Joint Stock Company (VIS) said the escalation of the US-China trade war will impact the local market as the US and China are the two largest trade partners of Viet Nam

Viet Nam’s industrial activity is still much dependent on FDI as its automation capacity remained low, Khanh said.

Weak resistance and high dependence are Vietnamese market’s inherent characteristics that have not been thoroughly resolved, he said.

However, Hung said, last week, the Hangseng index lost 3.92 per cent. Meanwhile, the US stock market continued to gain momentum with both S&P 500 and Nasdaq rising.

“Vietnamese stock market also gained ground, which is opposite to the regional trend,” Hung said.

It showed that although the tension of trade war is affecting the stock markets in the region, the Vietnamese stock was still upbeat, a scenario that somewhat beyond the prediction of many investors.

Although the market is going up, investors should still wait for more clear signals, Hung said.

But for risk-appetite investors, they can still trade normally because each stock has its own orientation and merits, he added. — VNS