Market Likely to Extend Gains This Week

The index closed 6.79 points, or 1.71%, higher at 403.3 last Friday, thus nearing the 200-day-moving average at 409 points. A break above it should definitely lift market sentiment as the media will quote the conquest of this long-term resistance line soon, Viet Capital Securities Co. (VCSC) said in its daily report.

Investor sentiment was boosted as Vietnam ranked seventh among the twelve best countries for long-term growth on CNBC television network. Meanwhile, investors expected more banks to join the race to cut lending rates and more news reports mentioned BIDV, VCB and CTG reducing their lending rates by 50 percentage points for premier clients.

“Though we have yet to see across-the-board declines in lending rates, investors are looking forward to further rate falls,” it added.

HCMC Securities Co. (HSC) after last Friday’s session noted that blue-chips all made gains as buying energy returned after a weeklong consolidation.

“Next week should start on a positive note but we would like to see some higher volumes as another attempt to move past 411 points on the VN-Index will require greater participation levels than what we are seeing currently,” HSC said.

In terms of technical analysis, VCSC said that short- and medium-term technical indicators still point towards higher levels. “The short-term momentum indicators, due to the consolidation, or slight correction, over the past days have moved closer to the zero line. So, more buying pressure should come in. We stay bullish in short- and medium-term,” VCSC said.

VCSC also noted that the big shift in sentiment usually follows after a market has gained 30%. “We keep all our open medium-term recommendations DIG, HPG, MSN and FPT. They are up 20% on average and outperformed the VN-Index by 5%,” the broker added.

The Hanoi market lost slight ground despite three rising and two falling sessions last week, with the HNX-Index falling 0.9 point, or 1.44%, against the previous week to close at 61.97. The market’s liquidity was slightly higher with the average daily volume of 34.7 million shares worth VND288 billion, falling by 20% and 18.7% from the week earlier respectively. The market is expected to move up again this week.