The local stock market is set to experience another week of corrections but the decrease will likely slow down with divergence based on the results of second-quarter earnings. (Photo: dautuchungkhoan.vn) Hanoi (VNA) - The local stock market is set to experienceanother week of corrections but the decrease will likely slow down withdivergence based on the results of second-quarter earnings, analysts said.
The benchmark VN-Index on the Ho Chi Minh StockExchange lost over 2 percent last week with four falling sessions and only onemid-week rising trade.
The key index closed on July 21 at 761.86points, down 2.7 percent from the nine-year peak of 782.665 seen on July 6.
On the Hanoi Stock Exchange, the HNX-Indexslumped 2.5 percent for the whole week, ending at 97.96 points on July 21.
“The market seems to be exhausted and facesrisks of downward corrections. However, the speed of fall last week was quitestrong and fast, negatively impacting investors’ psychology,” said Nguyen Huu Binh,leading analyst at Vietnam Investment Securities Co, told tinnhanhchungkhoan.vn.
But this could also be a sign that the marketwill soon retreat to the strong support threshold of 740-750 points, Binh said.
All shares, including large-caps, medium-capsand penny stocks, performed badly last week with a majority of stocks fallingacross the two exchanges’ electronic boards.
The shares weighing down the market mostincluded PV Gas (GAS), Vinamilk (VNM), big banks like Vietcombank (VCB), BIDV(BID), Vietinbank (CTG), Military Bank (MBB), Mobile World Group (MWG), steelmanufacturer Hoa Phat Group (HPG), insurer Bao Viet Holdings (BVH). They wereamong top 30 largest shares by market value and liquidity on the HCM StockExchange.
However, liquidity is waning, which may indicateweaker demand and a possibility that the high selling pressure would soon stop,Binh said, predicting would increase again at the 740-750 points for theVN-Index.
Trading volume through order matching method onthe HCM Stock Exchange rose 2.5 percent over the previous week, averaging 193.3million shares per session but it was seen that the volume was decliningtowards the end of the week.
“A downward correction was inevitable afterseven consecutive months of growth and in my opinion, this is an essentialcorrection before the market will advance into the next growing period in thelast months of the year,” said Nguyen Trung Du, head of the brokerage divisionin the North region under HCM Securities Co.
According to analysts at BIDV Securities Co(BSC), the VN-Index is likely to remain under correction pressure in the nextone to two weeks with a support threshold at 750 points. However, they added,the market will also see divergence based on second-quarter earnings results oflisted companies.
Nearly 320 out of total 719 companies on thestock exchanges, accounting for 45 percent of total listed companies, havereleased their second-quarter earnings as of July 21. In terms of absolutevalue, net profits of these companies reached 10 trillion VND (439 million USD),up 10 percent over the same period of last year.
Five biggest earners were Vietcombank, Pha LaiThermal Power, Vicostone, Kido Group and Nam Long Investment Group.
About 160 companies reported improved earningsresults compared to last year’s same period.
“With such results, the market will likelyexperience strong divergence in the coming time,” BSC’s stock analysts wrote ina report.
They suggested that investors refrain frominvesting in the companies with unstable business performance as well as thosethat have gained large value in the past rallies.-VNA
VNA
