Vietnamese shares are forecast to advance in March as investors may seize the chance to invest in companies that are about to provide clearer visions for 2019 at their annual shareholder meetings.

The benchmark VN Index on the Ho Chi Minh Stock Exchange fell a total 9.38 per cent to end last week at 979.63 points, with most of its weekly loss being caused by the negative effects of the no-deal DPRK-US summit.

On Thursday, the VN Index lost nearly 25 points or 2.50 per cent – the steepest intraday decline since October 11, 2018 – as investors seemed to panic after the US president Trump and the DPRK leader Kim Jong Un failed to end the Ha Noi Summit with a denuclearisation agreement.

The benchmark was also weighed down by selling sentiment, which was triggered after it had made a strong improvement since its comeback from the week-long Tet (Lunar New Year) holiday.

The VN Index in three trading weeks of February had gained more than 7.8 per cent. The stock market closed during the first trading week for Tet.

Foreign investors were net sellers in the last trading week of February, another factor that kept market sentiment down with total net sell value of VND1.2 trillion (US$51.5 million). 

Large-cap stocks that drove the market up in February such as Vinhomes (VHM), Vincom Retail (VRE) and Vingroup (VIC) were the worst-performing stocks last week, BIDV Securities Corp (BSC) said in its weekly report.

Though the market recovered on Friday, the decline of liquidity proved that there were few clues to say selling pressure had eased with both domestic and international markets lacking supportive information, BSC said.

In addition to the no-deal summit in Ha Noi, last week US president Trump signalled plans to withdraw from trade talks with China.

“The VN Index may continue struggling in the 950-1,000 point gap (like it did last week) before settling and showing a clearer path in the short term,” BSC said.

But there is more room for the Vietnamese stock market to advance this month, according to analysts and securities companies.

BSC said listed companies are expected to release their annual shareholder meeting files that include earnings estimates for the first quarter of 2019, dividend payout targets and earnings for the whole year.

According to SSI Securities (SSI), 1,005 listed companies on the three stock exchanges (HoSE, HNX and UPCoM) announced their 2018 earnings reports as of February 25. These companies account for 98 per cent of the stock market’s total value.

Total net profit of the companies rose 18.9 per cent year on year to VND276.2 trillion in 2018. But if the earnings of residential developer Vinhomes are excluded (VND13 trillion), the figure grew only by 13.3 per cent last year.

The top earners among all sectors were real estate, banking, financial services, utilities, petroleum and consumer staples. Real estate firms and banks posted annual growth rates of 75 per cent and 31 per cent, respectively.

Real estate and banking businesses are also projected to produce greater results in 2019 and higher dividend payouts for 2018, according to MB Securities JSC.

Investors are paying more attention to the macro-economy and corporate performance, and that is the factor that helped the market progress in February, MBS said in a note.

The upcoming annual shareholder meetings season with expectations and plans for earnings and dividends will support the stock market in the short period, at least to the end of April, MBS added.

“The capital is expected to spread to mid-cap and small-cap stocks after it has focused on blue-chips in the past three weeks, making the market more balance and lure more investment into smaller stocks, especially those that are being undervalued.” — VNS