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Experts: Risks loom as market surpasses 860-point level

Phuong Thao
Monday,  Nov 13,2017,18:42 (GMT+7)
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Experts: Risks loom as market surpasses 860-point level

Phuong Thao

HCMC – The local stock market rose to new highs last week, but risks emerged as cash flow still focused on large caps only, said some securities experts.

Nguyen Hong Diep, director of Saigon-Hanoi Securities Company’s HCMC branch, predicted the main index would reach 870 points in the near term, buoyed by Vietnam’s hosting numerous international meetings. Besides, the nation is going to benefit from bilateral trade ties and important economic policies are leaving good impact on the market.

Therefore, investor sentiment will improve, with good stocks strongly attracting cash flow, he said on vietstock.vn.

However, the market is still facing risks such as poor performance of some enterprises or abnormal transactions of derivatives. As Vietnam is a young market, new products always bring about manipulation risks, thereby dampening investor confidence, Diep explained.

According to Nguyen The Minh, deputy director and head of the capital market analysis department at Saigon Securities Inc., correction may occur in the next few days because data shows that November is the month of least profitability. As financial reports of enterprises do not support trading sentiment any more, profit taking pressure will increase sharply.

Aside from capital divestment plans of State-owned enterprises, APEC meetings are expected to open up new opportunities. However, the factors are not strong enough to support the market as cash flow only concentrates on a number of large caps.

Minh projected the market to enter a deep correction phase lasting around two weeks, with the VN-Index and VN30 Index suffering the most selling pressure. Notably, investors may strongly offload large caps having advanced sharply in the past time.

Meanwhile, banking and petroleum sectors are believed to save the indexes from a sharp decline. The oil and gas sector is performing nicely as global oil price has recovered given political uncertainties, Minh said.

Foreigners are still active on the market as their previous net selling was not a withdrawal but portfolio restructuring. In recent times, foreign investors have offloaded stocks with lower-than expected profitability to focus on more potential enterprises.

Therefore, having stayed on the selling side in previous months, foreigners may seek new investment opportunities. They will pay attention to large capital divestment deals in the coming time, the expert added.

During last week, the VN-Index skyrocketed 2.9% at 868.21 points while the HNX-Index jumped 1.93% at 106.37. However, both exchanges reported sluggish turnover.

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