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Market expected to be volatile this week

Phuong Thao
Monday,  Mar 5,2018,16:27 (GMT+7)
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Market expected to be volatile this week

Phuong Thao

HCMC – Stocks are expected to see strong volatility early this week as global markets will continue leaving strong impact on domestic equities, said securities companies.

Last Friday, the VN-Index fell 1% in early trade on news about U.S. steel and aluminum tariffs but rebounded throughout the day. It also bounced back from Thursday’s loss to rise half a percent and close within a whisker of a fresh 11-year high.

For the entire week, the index rose 1.7%, and has increased in eight out of the last 10 trading sessions, gaining 11.7% during that period.

In the property sector, DXG reached a record high and has nearly tripled over the past year after announcing upbeat guidance and two share dividends for this year at the company’s annual general meeting on the previous day. Meanwhile, KDH hit a record high and has almost doubled from a year earlier.

Still, Bao Viet Securities Company said that unfavorable global market movements made investors anxious and forced them to offload several stocks, especially speculative ones. Besides, the falling Brent crude oil price dealt a blow to domestic oil and gas shares.

However, bottom fishers were active after heavy losses in the morning trade last Friday, giving way to a market rally at the close. This week, the market may undergo volatility during first trading days with global markets remaining an unexpected risk, it predicted.

BIDV Securities Company estimated the main index to seesaw in a narrow range between 1,103 and 1,130 points this week. Investors, especially foreign players, will pay attention to the listings of large corporations such as PetroVietnam Oil and PetroVietnam Power on the market for unlisted public companies, or UPCoM.

According to Viet Capital Securities Company, a 25% tariff on steel imports into the U.S. would have moderate impacts on HPG, HSG and NKG.

Construction steel producer HPG exports around 2% of its total production volume, and an even smaller portion of this is exported to the U.S. Galvanized steel producers HSG and NKG export around 45% to 50% of production, but mostly to ASEAN countries.

For HSG, around 10% of total exports are to the U.S., while for NKG, this number is around 15%. Therefore, if implemented stateside, these tariffs would hit NKG more significantly than HSG, not only because of its higher export volumes, but also because NKG is less able to adjust its sales between export and domestic markets compared to HSG.

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