Market forecast to continue downtrend
By Phuong Thao - The Saigon Times Daily
HCMC – Securities enterprises still aren’t hopeful of a strong rally on the local market this week due to dull trading last week, saying the market would resume its downtrend with the VN-Index hovering above the 421- point level for the next few days.
Vietnam International Securities Co. (VIS) in its weekly report said investors were still worried about weak cash flow to the market given unfavorable developments on the U.S. market and no supporting information from the local economy last week. The VN-Index continued to shed 25.7 points, or 5.5%, against the week earlier to end at 429.14.
The market saw mild rallies in the last two sessions after losing big ground in three consecutive falling days. Closing the week, there were 10 stocks on the bourse advancing while up to 239 stocks edging back.
Liquidity remained dull with the daily trading volume averaging at 39.5 million shares worth around VND1 trillion, increasing by 12.4% and 2.8% from the previous week respectively.
VIS noted that foreigners remained active trading last week despite the pessimism of local investors. They were net buyers to a tune of VND110 billion worth of 3.7 million shares.
Au Viet Securities Co. (AVS) said last week’s decline was due to the supply and demand imbalance, coupled by strong selling pressure since the market moved down so sharply. “The imbalance, for the short-term outlook, will not improve if the lending rates remain high, cash flow to the market stays low and investors are pessimistic,” AVS said.
AVS estimates that the market is still in the downturn this week and may stage some brief recoveries before and after the National Day holiday, September 2. “Investors should watch developments on the local economy and be cautious of investment decisions given the short-term rallies,” AVS added.
HCMC Securities Corp. (HSC), meanwhile, has a positive look at the market this week. “We believe we are close to the bottom from a time perspective and we have said for some time that the beginning of September may bring some relief on both fundamental and technical grounds,” it said.
“We reiterate our standing advice that medium and longer term players can continue to buy in cautiously. For shorter-term players however while the last few days may seem tempting as offering a buying window we think the edge is still slightly to the downside and we advocate caution. However, we are getting very close in our opinion and the market may turn and enjoy a relief rally as soon as this week,” HSC added.
The Hanoi market ended the week down 13.13 points, or 9.99%, from the previous week to close at 118.28 with four falling sessions. Liquidity on the bourse continued to decrease with the daily average trading volume of 29.5 million shares worth VND648 billion. VIS expects the market to fluctuate within a narrow range this week.