Vietnamese shares are likely to remain quiet in the final trading week of the lunar new year with trading liquidity predicted to remain modest.

Both local stock indices went through a subdued Friday session with their closing levels almost unchanged on a daily basis.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange finished last week at 908.88 points after having rallied total 0.26 per cent in three sessions.

The southern market index gained total 0.73 per cent on a weekly basis.

The HNX Index on the Ha Noi Stock Exchange ended Friday at 102.74 points, closing the week 1.16 per cent higher than the previous one.

Stock market trading liquidity suffered a big decline from the previous week as investors’ sentiment was weighed down by concerns over the lack of information from both domestic and international markets.

There were no positive signals in US-China trade relations that could solve the dispute between the world’s two largest economies.

Global investors are still concerned over the border wall dispute between US president Trump and Congress, which could lead to another shutdown in mid-February.

The conflict between Trump and Congress sparked concerns among global investors about how it can affect the US – the world’s largest equity market.

Any moves in the US market would hit Vietnamese stocks hard, especially when the domestic market lacks supportive news from the corporate earnings season.

Among all listed companies, only banks released results that beat both their plans and previous-year figures.

Some banks that recorded higher profits in 2018 included the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Tien Phong Joint Stock Commercial Bank (TPBank), Military Joint Stock Commercial Bank (MBBank) and Sai Gon Thuong Tin Joint Stock Commercial Bank (Sacombank).

As the macroeconomic conditions are predicted to improve this year, banks are expected to post higher profits in quarters to come with the first three months in forecast.

Yearly earnings growth and first-quarter earnings expectations have boosted bank stocks in recent weeks.

Vietcombank shares (VCB) have gained 7.3 per cent in the last month, TPBank shares (TPB) have increased by 10.3 per cent, and the growth for MBBank (MBB) and Sacombank (STB) were 14.3 per cent and 10.8 per cent, respectively.

Despite earning big in 2018, securities firms reported lower profit in the fourth quarter due to the slowdown of the securities market. With trading liquidity has been low since the end of the year, those firms are likely to record negative growth rates in the first three months of 2019.

Troubling liquidity

One of the main problems for the stock market at the moment is low liquidity as investors have been pulling out of the equity market, trying to save some money before the nine-day holiday in Tet (Lunar New Year).

“The market often gets quiet whenever it is close to the Tet holiday,” Sai Gon-Ha Noi Securities (SHS) said in its weekly report.

“Big money hasn’t shown any signals of returning to the market. Investors are standing by the market at the moment and they are not ready to return,” SHS said.

An average of more than 161.8 million shares was traded on the two local exchanges in each session of last week, worth VND3.13 trillion (US$134.9 million).

The figures were down from 282 million shares in volume and VND3.5 trillion in value recorded in the previous week on January 14-18.

“Market liquidity is forecast to remain low next week,” Bao Viet Securities Co (BVSC) said.

The stock market may not see big changes in the coming sessions and the indices were forecast to move marginally towards the 913-916 point zone, Artext Securities Co said. – VNS