HÀ NỘI – Việt Nam’s stock market is forecast to keep rising in the short term but a few corrections may be necessary to re-balance the market after a long rally.

On the HCM Stock Exchange, the benchmark VN-Index saw the first adjustment session in the New Year on Friday but still posted a weekly gain of 2.9 per cent, ending 2018’s first trading week at 1,012.65 points, the highest level since the end of November 2007.

Meanwhile, the decline on Friday also cut growth of the HNX-Index on the Hà Nội Stock Exchange to 1.8 per cent, closing the week at 118.92 points.

The excitement of the market after conquering the 1,000 points level has temporarily subsided. However, this was reasonable as the VN-Index has rallied for nine consecutive sessions, a weekend report by Viet Dragon Securities Co said.

The benchmark VN-Index increased 7.8 per cent in the past two weeks and climbed 48 per cent in 2017.

“I don’t think the VN-Index is adjusting down,” said Hoàng Thạch Lân, head of the individual investor division at Viet Dragon Securities Co.

Lân said since December, the VN-Index has been driven up by large caps, especially the 20 companies with market values of over US$1 billion (accounting for over 75 per cent of HCM Stock Exchange’s total market value).

Three-forths of these companies rallied in the past one month with an average of about 13 per cent, with some seeing gains of more than 20 per cent such as PV Gas (GAS), Petrolimex (PLX), Masan Group (MSN) and Hòa Phát Group (HPG).

Only a few shares lost including brewers Sabeco (SAB) and Habeco (BHN), Mobile World Investment Group (MWG) and FLC Faros Construction (ROS).

The alternative growth of these heavyweight stocks will likely fuel the market in the short term, Lân said.

Liquidity was positive last week with an average of 285.5 million shares worth a combined VNĐ7.1 trillion ($311.4 million) being traded in the two markets per session.

Foreign traders were also active on HCM City’s exchange, responsible for a total net buy value of nearly VNĐ1.2 trillion. However, they were net sellers in Hà Nội’s market for VNĐ221.5 billion.

Real estate stocks

Bank stocks were sold heavily in the weekend session after a long rally and analysts have reckoned some investors are channeling money into realty shares in expectations of high earnings in the last quarter of 2017.

According to Nguyễn Thế Minh, deputy director of Saigon Securities Inc’s Retail Research, real estate companies are used to reporting high profits in the last quarter of the year. Now it is the start of the earnings reporting season and investors pay high attention to the companies with positive earnings prospects.

“I expect the real estate stocks will pick up in the first months of 2018, especially the companies with unanticipated profits recorded from transfer of projects,” Minh was quoted as saying on the tinnhanhchungkhoan.vn.

In addition, the valuation of realty stocks are now lower than the general market’s value, he said.

However, Nguyễn Hồng Khanh, head of analysis at Sacombank Securities Co, has warned investors of the right selection as there may be a number of companies reporting losses in the last quarter.

“Seeking low-priced stocks is necessary but the most important thing is to choose the right growing stocks,” Khanh said. – VNS