Brokerages predict poor run to continue this week

Securities brokerages have predicted the stock market would continue to experience low turnover this week as investors would reduce trading after the VN-Index suffered heavy losses last week.

Last Friday, the VN-Index of the Hochiminh Stock Exchange edged higher in early trade but failed to stay in the green for long, closing down 1.03% to the intraday low of 900.82. Trading value on southern bourse was just VND3.2 trillion, way below the average of the past year of VND4.5 trillion.

The index fell each day this week for a 6.1% pullback, its worst week since May, and has dropped for four straight weeks. Foreign investors net sold VND413 billion worth of shares during the week.

Housing developer VHM was again the major drag in the day’s loss and slumped 13% this week. Banks also weighed on the market, led by VCB, CTG and VPB.

The HNX-Index of the Hanoi Stock Exchange closed the week down 5.83%. However, the northern bourse still reported a foreign net buying value of over VND75 billion.

Analysts and investors attributed the strong fall on the Vietnamese stock market to negative impacts from some regional markets. Further, falling crude oil price globally caused domestic oil and gas stocks to slump.

This week, although the sharp decline in local markets may encourage investors to purchase cheaper-than-expected stocks, investor sentiment is quite poor as the VN-Index tumbled to new lows last week.

Bao Viet Securities Company in a recent report said the two local stock exchanges may see continued poor turnover this week as investors will trade cautiously. The stock indexes are expected to continue to decline with high divergence among groups of stocks.

BIDV Securities Company said the market will suffer a strong fluctuation this week due to investors’ caution and concerns about short-term market trends, especially after trading showed signs of declining and the market breadth was negative over the past weeks.

FPT Securities Company, meanwhile, said the market is showing unclear signs of movement at the moment, so investors should limit their trading.

Long-term investors may consider restructuring portfolios during falling sessions this week. Meanwhile, short-term players may face huge risks at the moment and they should only return when the market receives strong supporting news, such as better macroeconomic data or good business results of listed enterprises, it said.

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