Market may keep retreating on low volumes

The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) ended last Friday at 966.21 points, recording a weekly loss of 1.69 per cent.

The minor HNX-Index on the Ha Noi Stock Exchange (HNX) fell 1.70 per cent last week to finish at 105.88 points.

Trading volume on both local bourses reached average 176.2 million shares in each session of last week.

Last Friday, indexes recovered slightly on extremely low volumes. The timely recovery helped both VN-Index and HNX-Index stay above their important resistance zones. However, signals of a reversal have not yet appeared.

Market liquidity was still on a downward trend and indices were still correcting, Vu Minh Duc, Senior Manager at Research and Analysis Department of Viet Capital Securities Company (VCSC), told tinnhanhchungkhoan.vn.

“It is likely that next week, the VN-Index will decrease, heading towards the strong resistance of around 950 points,” Duc said.

Amid the annual general meeting (AGM) season as well as the announcement of the first quarter business results of listed companies, there would be mixed results among stocks, especially blue-chips, Duc said.

According to former head of IVS Securities Co’s analysis department Nguyen Huu Binh, recent low liquidity was mainly caused by poor market sentiment, especially individual investors who were not in a good mood and chose to either stay out of the market or offload their portfolios to earn profits.

The market is expected to face risks of a decrease this week. Upward sessions (if any) are forecast to be only technical rebounds, Bao Viet Securities said in its daily report.

“We leave open the possibility that the VN-Index will fall to the support zone of 940-950 points before a recovery,” it said.

This week, VN-30’s investment funds also conduct portfolio reviews for Q1, 2019. Blue-chips in VN30 basket, subsequently, may see unexpected fluctuations, the company said.

“Investors could become even more cautious and hold off on investing, especially when the long holiday is coming. The market is expected to decrease in the short run. Stock exposure, therefore, should be limited at 20-30 per cent of the portfolio,” the company said.

Investors with high stock proportions should take advantage of market’s recovery to lower stock exposure. Investors should hold off on buying new positions as the market is currently facing various risks, it added.

Last week, the declining trend dominated the market. Bottom purchasing activities were no longer happening regularly when the market appeared to decline with low liquidity.

The weakening of “Vingroup” stocks, especially two stocks of Vingroup (VIC) and Vinhomes (VHM), were the main reasons for negative movements of the market.

The decline of the large-caps in the food and beverage group also contributed to the fall of the overall market. Dairy firm Vinamilk and brewery firm Sabeco both recorded significant slumps.

Last week, the banking group struggled, while oil and gas stocks were under high correcting pressure. Vietinbank and Techcombank plunged. PetroVietnam Drilling Mud Joint Stock Corporation (PVC), PetroVietnam Transportation Corporation (PVT) and PetroVietnam Coating JSC (PVB) had corrected during the week but then recovered quite well during the last session of the week.

The optimistic point was that foreign investors were the net buyers of almost VND554 billion on the two stock exchanges. They net bought more than VND508 billion on the HoSE and VND45 billion on the HNX.