Market to fluctuate in the week ahead

The market is expected to experience ups and downs within a narrow band during the coming week. Cautious sentiment will dominate the market as investors wait for information about the restructuring of exchange-traded funds and the Fed’s meeting.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange rose 0.37 per cent on Friday to close the week at 953.61 points.

The index lost a total of 0.49 per cent last week.

On the Ha Noi Stock Exchange, the HNX-Index edged down 0.03 per cent to end Friday at 103.46 points.

The index lost a total of 0.72 per cent last week.

Weak purchasing power was cited as the reason for lower trading liquidity, with an average of 171.6 million shares traded in each session last week.

According to market expert Ngo Quoc Hung from MB Securities Joint Stock Company (MBS), there was a dominant downward trend last week, causing the market to fall for the fourth week in a row since the beginning of May.

“The VN-Index was moving in reverse to the gaining trend of world markets. Liquidity was at the lowest level of the past 18 weeks,” Hung told news site tinnhanhchungkhoan.vn.

He said investors would be cautious this week as they wait for information about the portfolio restructuring of exchange-traded funds (ETFs). The most important information investors worldwide are waiting for is the outcome of the Fed's monetary policy meeting on June 18 and 19.

Bao Viet Securities Company (BVSC) said in its daily report that low liquidity and the domination of a few large-cap stocks continued to show the market lacks internal strength.

“Therefore, we leave open the possibility that the index would fall to support zone 930-940 points before rebounding," BVSC wrote. "ETFs will implement Q2 2019 portfolio reviews next week; therefore, indices in these funds’ portfolios are expected to fluctuate unpredictably."

Banking stocks may still have room for recovery in several sessions, but they are likely to alternate between ups and downs. Oil and gas stocks are forecast to drop before rebounding, BVSC said.

Last week, major real estate developer Vinhomes (VHM) was one of the worst-performing stocks on the market, losing 2.5 per cent. Correcting pressure also weighed on large food and beverage stocks like dairy firm Vinamilk (VNM) and consumer staples firm Masan Group (MSN), which both fell more than 2 per cent.

Falling global oil prices had a negative impact on Vietnamese oil and gas stocks. Most of this group's stocks were hit by strong selling pressure. PetroVietnam Technical Services Corporation (PVS), PetroVietnam Drilling and Well Services Corporation (PVD) and PetroVietnam Construction Corporation (PVC) all plunged more than 3 per cent. PetroVietnam Gas JSC (GAS) fell by less than 1 per cent.

Last week, Brent oil prices fell by more than 1.5 per cent, while WTI lost 2.7 per cent.

Most banking stocks performed well last week, with a strong final session making up for earlier struggles. The best performer was Vietcombank (VCB), which posted a gain of more than 5 per cent for the week. Other large-caps like Bank for Investment and Development (BID), Military Bank (MBB) and Asian Commercial Joint Stock Bank (ACB) also climbed. 

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