Market remains volatile on macro economic concern
By Thuy Trieu - The Saigon Times Daily
HCMC – The recent string of bad news has unnerved stock investors, with the VN-Index last week shedding 2.5% to 496.91 points, and the volatility is forecast to continue this week if the market still lacks supporting news.
The market has moved in narrow ranges for the past two months. Offers increased when the VN-Index approached the 510-point level and the 480 points level proved to be a solid supporting level for the index. “To break the sideway trend, the market really needs a strong push,” said APEC Securities Co.
APEC said stocks on the market now had a price per earning ratio (P/E) ranging from 7 to 12, while some stocks almost equaled to their book value and were unattractive for strategic investment in value. However, the market has kept its sideway movements over macro economic concerns, said APEC.
The broker said macro economic concerns, especially about inflation and interest rates, had dampened the market. However, the VN-Index would be buoyed by good fundamentals of listed companies and potential growth of the economy in long term, it said.
“The market would continue moving between 475 and 520 points this week and to see a strong breakthrough, investors should wait for clearer macro policies in March,” APEC said.
Despite dampened investor sentiment, liquidity improved last week. The market’s average daily trading volume was 28.6 million shares worth VND1.2 trillion, up 28.3% and 21.3% respectively from the week before the Lunar New Year holiday, Tet.
Therefore, an analyst of HCMC Securities Corp. (HSC) said, “The loss during the first week of trading of the new lunar year seems contained for a moment and intraday volatility has declined to very low levels. Meanwhile, turnover has held up quite well, which we consider as a fairly positive indicator for the short to intermediate term.”
The broker said the high February CPI figure did not trigger further losses in the market. “When bad news does not affect prices in a negative way anymore, stock prices are usually not far from a rebound, while any positive news further down the road could lead to a sharp rebound,” it said.
HSC’s analyst said both markets were locked in between or hovering around technically important levels defined by the moving averages. Prices might be consolidated for some more days or even weeks, but the bias remains to be on the upside, it said.
Similar to the southern bourse with small change on the index, Hanoi’s market lost 3.17 points last week compared to the pre-Tet week to stay at 162.43. The market’s average daily volume was 11.6 million shares worth VND370.7 billion, up 11.2% and 12.7% respectively from the previous week.