Shares may continue rising this week as investor confidence increases at the beginning of the lunar year, analysts say.
Banking stocks are expected to take the lead with investors expecting improvements in the sector, they add.
The benchmark VN Index on the HCM Stock Exchange on Friday fell 0.4 per cent to end last week at 700.35 points, after rallying 3 per cent in the previous five sessions to reach a nine-year high of 703.18 points on Thursday.
At the Hà Nội Stock Exchange, the HNX Index rallied for a fourth day, increasing 0.5 per cent to end at 85.03 points. The northern market index has moved up 2.4 per cent in the last four sessions.
Investor sentiment is often high at the beginning of the lunar year, and this will be an important factor that could lift the market, as seen in the five consecutive days ending Friday.
“Positive investor sentiment at the beginning of the lunar year will help increase investment in the stock market, especially when the resistance range of 690-700 points has been surpassed for the first time since September 2016,” said Phan Dũng Khánh, head of the investment consultancy at Maybank Kim Eng Securities Co Ltd.
Before the Tết (Lunar New Year) holiday, the VN Index had crossed the 690 point level, and the nine-year high was reached after the market returned from a one-week break.
This caused both regret and excitement among investors because they had pulled out of the stock market during the pre-Tết holiday period, missing the opportunity to participate in the market’s improvement, Khánh said.
The stock market will also be lifted by investor expectations of Government policies to support the economy and businesses, along with the release of companies’ earnings reports, and by large-cap groups that are preparing to be traded on the stock market, he added.
The VN Index corrected itself on Friday after a five-day rally.
According to Vũ Minh Đức, head of individual customer analysis at Việt Capital Securities Company, the correction on Friday was a must-decline session so that the VN Index can continue increasing in the near future.
More specifically, the benchmark index might decline during some of the first trading days this week to test the support range of 695-700 points, then increase to the middle-term resistance level of 740-750 points within months, he said.
Banks will lead the market in the coming week, and this year, as investors are counting on the restructuring plan for the entire banking system, as well as on the possibility of a policy that allows banks to lift the bar for foreign investment this year, as Prime Minister Nguyễn Xuân Phúc told Bloomberg TV in January, Đức said.
Bank stocks, such as Vietcombank (VCB), BIDV (BID) and Vietinbank (CTG), weigh heavily on the market, as do other blue chip firms including dairy producer Vinamilk (VNM) and brewer Sabeco (SAB). While the price-to-earnings ratios of the large-cap bank stocks are lower than that of the latter, it also means the potential for bank stocks to grow is quite high, Đức said.
Investors may also take earnings reports of listed companies into account this week, according to Nguyễn Ngọc Lan, head of the broker division at Agribank Securities Company.
Companies that saw yearly increases in their earnings for 2016 include dairy producer Vinamilk, steelmaker Hòa Phát Group (HPG), real estate group FLC (FLC) and Faros Construction Corp (ROS).