The market weakened for the second week last week, with lower liquidity and net selling from foreign investors. Given less positive financial results of businesses in the third quarter, along with negative movements around the world, experts say the downtrend might continue this week. 

 

On the Hồ Chí Minh Stock Exchange (HoSE), the market benchmark VN-Index edged 0.53 per cent lower in the last session to 1,334.89 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) declined by 0.24 per cent to 356.49 points. 

 

For the week, both benchmark indices fell 1.2 per cent and 0.8 per cent, respectively. 

 

Last week’s liquidity decreased compared to the previous week and was lower than the average of the last 20 sessions, with a trading value of about VNĐ22.1 trillion (US$972 million) per session on the two main exchanges.

 

Of which, the trading value on HOSE slid by 11 per cent to over VNĐ95.9 trillion, with a fall of 23.3 per cent in trading volume to 3.2 million shares. On HNX, the trading value fell by 20.9 per cent to VNĐ14.8 trillion, equivalent to a trading volume of 699 million shares, down 26.5 per cent.

 

Last week, foreign investors net sold more than VNĐ1 trillion on both exchanges. Top three stocks being sold the most were Hoà Phát Group (HPG), Vingroup (VIC) and Vietcombank (VCB), with a sold value of VNĐ370 billion, VNĐ160 billion and VNĐ133 billion, respectively. 

 

On the other hand, Vinamilk (VNM) was the most wanted stock with a buy value of VNĐ394 billion.

 

Mirae Asset Securities Việt Nam said that after the debt crisis of China developer Evergrande, the stock market was hit by news that the country’s GDP in the third quarter plunged by 6.17 per cent.

 

The news raised concerns over the decline of business results in the third quarter. While many sectors were affected by the news, leading to a strong sell-off during the week, energy stocks recorded impressive performance.

 

Many key stocks in the sector surged more than 10 per cent such as PetroVietnam Gas (GAS), PetroVietnam Drilling & Well Services Corporation (PVD) and Petrovietnam Fertilizer & Chemicals Corporation (DPM). Some mid-cap stocks of the industry like CNG Viet Nam Joint Stock Company (CNG), Petro VietNam LPG (PVG), Southern Gas Trading (PGS) even jumped more than 20 per cent. 

 

In the last two weeks, the VN-Index has moved in the same volatile scenario, which diminished in the first session of the week due to bad news, then recovered in the remaining sessions. After continuously creating bottoms in the last two weeks, the benchmark has stepped into the short-term downtrend with a narrow range. 

 

The securities firm forecast that the downtrend will continue this week and the losses may be around 2 per cent, so the expected support zone will be around the 1,316 - 1,320 point-level.

 

Meanwhile, Vietcombank Securities Company (VCBS) said that the market benchmark experienced a choppy week amid the lack of supportive news.

 

Cash flow was still limited and showed no signs of returning to the market, as both trading volume and value were low. The strong and negative movements of major global indices like Dow Jones, S&P 500 and Nikkei 225, caused the VN-Index to plummet in the first session of last week.

 

However, these factors’ impact on Việt Nam’s stock market was not great, as energy stocks posted a weekly gain, while bank and real estate stocks slid and were unlikely to break out of the downtrend that has taken place in recent months.

 

Therefore, the negative impact of the strong fluctuations in the global and regional financial markets on investors sentiment is inevitable.

 

Nevertheless, VCBS expects that the country’s stock market in the medium and long-term is still positive, boosted by the gradual recovery of economic growth post-pandemic, which is in line with the Government's loosening of social distancing orders while the COVID-19 prevention measures are still applied. 

 

VCBS also believes that the market division is likely to continue, as stocks with positive business prospects in the last quarter of 2021 and next year’s growth potential will keep attracting cash flows.

 

VCBS recommends that investors carefully assess companies’ business activities before disbursing and should prioritise stocks with growth potential that have not been fully reflected in prices.

 

On the technical front, Saigon-Hanoi Securities JSC (SHS) said that the trend of the market benchmark has become worse when it lost the threshold of 1,350 points.

 

SHS expected that the index may struggle and fluctuate between the resistance zone of ​​1,340 - 1,345 points and the support level of ​​1,330 - 1,335 points.

 

In the negative scenario, if the VN-Index loses the support zone around 1,330-1,335 points, the index might head to the psychological support level of around 1,300 points.

 

Most of the stock sectors traded down, with bank stocks losing the most, down 3.9 per cent in market capitalisation. 

 

On the other side, the energy industry gained the most, up 9.8 per cent in market capitalisation, thanks to the group of pillar stocks like GAS up 13.7 per cent, PetroVietnam Power Corporation (PV Power, POW) up 6.9 per cent,  and PVD up 10.8 per cent. — VNS