Vietnamese shares are forecast to continue their upward trend this week as profit-taking pressure is cooling down significantly.
On the Ho Chi Minh Stock Exchange, the VN-Index rose 0.82 per cent to close Friday at 1,262.33 points.
An average of 99.2 million shares was traded on the southern exchange during each session last week, worth VND1.9 trillion (US$81.2 million).
Since setting a bottom of around 1,140 points at the beginning of July 2022, last week was the 5th week of the VN-Index’s continued upward recovery and this index has surpassed the threshold of 1,260 points, said Sai Gon-Ha Noi Securities JSC (SHS).
According to analysts, foreign investors continued to be net buyers, especially on HOSE, where foreign investors had the 4th consecutive week of net buying, which showed that the macro context has improved, it said.
However, higher interest rates and capital costs may affect businesses, and existing inflationary pressure will still be factors investors need to pay attention to during this period.
"The short-term trend of the market is still positive and the VN-Index may head to the next resistance zone in the range of 1,260-1,285 points in the near future," said SHS.
From a long-term perspective, the market is still forming an accumulation zone on the basis of low valuation compared to the average of many years, in the context that economic growth is maintained, through which there are many investment opportunities.
Investors can consider selectively disbursing and accumulating stocks with growth prospects in the third quarter of 2022, maintaining good business results and earning revenue, and attracting short-term cash flow, SHS recommended.
Mirae Asset Securities (Vietnam) said that the short-term and medium-term uptrend will continue to be maintained. The nearest resistance level of the VN-Index is the old peak of 1,270 points. However, this securities company noted the important resistance level of the index is 1,285 points.
"VN-Index is under correcting pressure when approaching the 1,265-1,275-point resistance zone. We believe that the market will need more time for stock groups to establish a new price base after recovering from the bottom. Therefore, investors should take advantage of the bullish pulses in the next sessions to sell and reduce stock exposure," said Bao Viet Securities Co.
In the market macro report in July, BIDV Securities Co (BSC) proposed two scenarios for the VN-Index in August.
In the first scenario, BSC said that the VN-Index will balance at the threshold of 1,200 points, heading to 1,300 – 1,320 points when liquidity improves and positive sentiment spreads in the market.
"The economy continued to show positive signs besides the efforts of the authorities in controlling inflation, promoting economic growth, and freeing up credit capital. The market is forecast to continue to differentiate based on Q2 business results. Well-performing businesses could be cash flow destinations during this period. In this scenario, the liquidity is forecast to fluctuate at $0.8-1 billion per session."
The second scenario occurs if the recession in the US, as well as other developed economies, continues, in addition to the slowdown of the Chinese economy as the COVID-19 pandemic develops. The VN-Index is forecast to fluctuate around 1,200 points.
On the Ha Noi Stock Exchange, the HNX-Index rose 1.08 per cent to end Friday at 303.42 points.
An average of 99.2 million shares was traded on the northern exchange during each session last week, worth VND1.92 trillion. — VNS
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