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Tuesday,  Apr 24,2018,00:23 (GMT+7)

Frequent corrections expected this month

Phuong Thao
Monday,  Apr 9,2018,18:12 (GMT+7)
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Frequent corrections expected this month

Phuong Thao

HCMC – The stock market is predicted to experience many corrections this month as big-cap stocks have rallied sharply on strong demand, said Hoang Thach Lan, head of the individual investor department of Viet Dragon Securities Company.

Having slumped in late March over fears of a U.S.-China trade war, the market has bounced back strongly since early this month, indicating that local equities have not been impacted by world markets.

In March, stocks of many sectors such as industry, service, construction, real estate and consumer goods rose strongly. This month, some large companies will release their first quarter earnings results and those having good earnings will certainly see their shares soaring, Lan was quoted by vietstock.vn as saying.

However, Lan said investors might worry about risks such as a possible correction of key stocks. Large-cap stocks on both HCMC and Hanoi exchanges have rallied strongly in recent times.

Foreign investors were on the selling side in March but they remained net buyers during the first quarter. Notably, they have offloaded stocks with goods fundamentals such as dairy firm VNM, lender VCB and construction firm CTD while buying shares of property firm VIC and retail group VRE.

Besides, capital divestment and initial public offerings by State-owned enterprises will help drive the market up. Major firms such as GAS, BID, HVN and PLX might see their stocks advancing when they announce divestment plans.

This month, investors should pay attention to key sectors such as banking, real estate and petroleum. Most banks are projected to obtain good first quarter and full-year earnings, supported by the credit growth target of 17%.

Besides, banks have focused more on consumer lending. Some institutions will gain better profits as they have cut provisions or divested from financial investments.

For the oil and gas sector, local firms still depend on the global oil price, which is expected to hit US$75 per barrel. Investors should stay cautious when buying petroleum stocks, Lan added.

The VN-Index of the Hochiminh Stock Exchange rose to a new high last Friday, closing up 0.57% at just shy of 1,200 points. For the week, the index advanced 2.2% for an eighth straight week in a row.

VRE and its parent company led gainers. Earlier this week, VIC sought approval from the Hochiminh Stock Exchange to list 2.7 billion shares of its Vinhomes unit.

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