Vietnamese stocks are regaining momentum and are expected to remain upbeat during upcoming trading thanks to improved liquidity and cash flow, analysts said.

The benchmark VN-Index on the HCM Stock Exchange (HOSE) plunged 1.12 per cent to close Friday at 933.39 points, reversing from its increase of 5.7 per cent during the previous six sessions.

It increased a total of 2.6 per cent over the week.

The HNX-Index on the Ha Noi Stock Exchange gained 1.93 per cent to end at 107.62 points. The northern market’s index notched weekly growth of 4.97 per cent.

Trading liquidity improved last week with an average of more than 225.1 million shares being traded in each session, worth VND4.7 trillion (US$205 million).

The trading figures were up 42 per cent in volume and 49 per cent in value compared to the previous trading week. That indicated investor confidence in local stocks was growing, according to analysts.

According to market expert Ngo Quoc Hung at MB Securities Joint Stock Company (MBS), the Vietnamese stock market experienced a recovery last week as forecast, with the VN-Index regaining the 930-point level.

The local market was one of the top three global securities markets with the largest rebound in the past week, Hung said.

The return of cash flow was the highlight of the past week. Trading value on HOSE reached the highest level in three weeks, standing at VND3.3 billion per session, up 46.4 per cent compared to the previous week.

Leading stock groups such as banks and real estate were still the drivers of the market.

The market is likely to stay on an uptrend this week and may rise to the point range of 975-996, Hung said.

As the half-year reports continue, disbursements are on the rise to catch up with investment opportunities. Stocks achieving satisfactory business results such as banking, real estate and the growth of mid-cap and small-cap stocks are creating the necessary support for the market and will continue to perform this role well this week.

According to Hung, concerns over the trade war seemed to have been exaggerated. In the past three weeks, the VN-Index had fallen by 3 per cent while the MSCI’s broadest index of Asia-Pacific shares outside Japan dropped slightly by 0.3 per cent.

On the Chinese market alone, the Shanghai index recorded only a modest decrease of 0.6 per cent. The Dow Jones even climbed steadily over the past three weeks with a rise of 3.24 per cent.

“I think the market will continue to maintain its uptrend in the coming week and the cash flow will continue to come back, it may also see some shaking sessions or slight correction when the profit-taking pressure increases,” said Nguyen The Minh, head of analysis at Yuanta Securities Vietnam Co.

For a broader forecast, according to Bao Viet Securities Company (BVSC)’s Strategic Report, in the second half of this year, stable macroeconomic indicators would support the stock market.

However, Viet Nam’s stock market also faced risks in the last six months. Domestic risks may come from unpredictable inflation and movements of the US dollar and the yuan, which may affect cash flow into the stock market.

External risks may derive from the Fed’s rate hikes, trade war fears and the withdrawal of capital from emerging markets.

“After carrying out analyses of these factors, we forecast that the market will stay on a downtrend in the third quarter. In the best-case scenario, if a trade war does not occur amid the stabilisation of exchange rates and inflation, the market may reverse to an uptrend in the last quarter and fluctuate at around 900 points by the end of this year,” BVSC said. — VNS