Profit Taking to Extend This Week: Brokers

The market saw aggressive volatility in the first week of extended trading hours, with the VN-Index losing 7.49 points, or 1.7%, to close at 432.11. The index returned to around where it was a week ago while liquidity decelerated toward the weekend.

“Looking forward to next week there are no major macro indicators on tap. However, we may see actual trade deficit figures from the General Customs Office on Friday. There have been rumors that the February trade numbers will be revised downwards from US$800 million to US$200 million but this bit of good news may have been already priced in,” Viet Capital Securities said after last Friday’s session.

“So unless the market gets another “shock” to the system like it did with the gas price increase this week, we think on Monday’s buying momentum could carry-over to next week,” it said.

However, retail investors came in towards the intraday bottom with settled T+4 money from closed out positions at the start of the week. More retail money may come back into play on Monday as there were many investors who also cashed out near Tuesday’s peak before the correction, it said.

Concerning recent strong rise, HCMC Securities Corp. said at this stage of the bull market, it is normal that equities are faced with bad news from time to time. But that does not affect the real reason for the start of any bull market: things going from bad to less bad.

The broker said the bears seem to be in charge in short term but investors have to make a clear distinction between fact and fiction. The sudden and sharp rise of gasoline prices, an important component of the CPI (consumer price index) basket, last week will certainly result in higher monthly inflation figures over the coming months. But it does not affect the longer term dis-inflationary scenario that is in force in Vietnam at the moment. As such, the move will only partially delay the drop of the 12-month rolling CPI figure.

The Hanoi market also saw a decrease with four falling sessions last week. The HNX-Index lost 0.16 point, or 0.22%, from a week earlier to 71.56. The market’s liquidity remained high with an average daily volume of around 101 million shares worth VND949 billion. The market is predicted to continue dropping this week.