Signals of market recovery not clear: experts

February 21, 2022 - 07:01
Experts from securities firms said the market’s recovery trend is uncertain this year and investors are recommended to pursue surfing investment in the short term.
An investor watching the market's movements on his phone. Photo

HÀ NỘI — Experts from securities firms said the market’s recovery trend is uncertain this year and investors are recommended to pursue surfing investment in the short term.

The market finished a choppy week with the VN-Index hovering above the key 1,500-point level.

Accordingly, on the Hồ Chí Minh Stock Exchange (HoSE), the market benchmark VN-Index ended last week at 1,504.84 points, down 0.21 per cent. However, it still recorded a third weekly gain, up 0.2 per cent for the week.

The HNX-Index on the Hà Nội Stock Exchange (HNX) closed the last trading session at 435.61 points. For the week, it rose 2.04 per cent. 

The market’s liquidity remained weak, hovering below the average for the fourth straight week, with around VNĐ23.5 trillion (US$1.02 billion) traded per session on two main exchanges. 

Meanwhile, foreign investor sentiment was quite positive. For the week, they net bought 23.5 million shares, worth over VNĐ1.54 trillion. 

Analysts from Saigon-Hanoi Securities JSC (SHS) said that the past week was quite dramatic, with a series of negative reports such as sharp increases in inflation in some major countries, and escalating geopolitical tensions between Russia and Ukraine.

However, demand at low price zones was still quite good, which helped the benchmark recover quickly.

After posting an extraordinary opening in the first week after the Tết holiday, bank shares reversed and fell sharply last week. These stocks lost by 4.2 per cent in market capitalisation, creating correcting pressure on the market. 

The losses were limited thanks to gains in the remaining groups of stocks. Of which, consumer services industry reported an increase of 4.5 per cent in market capitalisation, boosted by the positive performance of retail stocks such as Digiworld Corporation (DGW) up 3.6 per cent, and airline stocks like Vietnam Airlines (HVN) up 4.2 per cent and Vietjet Aviation JSC (VJC) up 12.2 per cent.

The consumer goods industry also cushioned the market with a gain of 3.8 per cent in market capitalisation, mainly thanks to the strong rise of the pillar stocks, including Masan Group (MSN), up 9 per cent.

Although the market remained above the psychological threshold of 1,500 points, helping to strengthen the sentiment of investors holding stocks, the weak cash flow was reflected in lower than average liquidity.

SHS said that if the cash flow does not improve this week, the benchmark is likely to continue struggling and accumulate in the area of ​​1,480-1,520 points. 

Investors who participated in buying sprees before Tet in the sessions of January 12, January 18 and January 24 can continue to hold the current portfolio to wait for the market to head toward the resistance zone of 1,530-1,550 points, which can be achieved in the near future.

Meanwhile, Vietcombank Securities Company (VCBS) said that even though the VN-Index has sent more optimistic signals after ending the week above 1,500 points, despite negative news from the global stock market, it will still tend to recreate the accumulation base of around 1,500 points this week, up or down in a range of 10 points.  

During this period, the appropriate investment strategy would be a short-term surfing trade in a narrow range, with strict adherence to stop-loss and profit-taking levels in case the market suddenly corrects, VCBS recommends. 

SSI Securities Corporation (SSI) said to really return to the uptrend, the VN-Index still needs to overcome resistance level at 1,512 points with rising trading volume to consolidate for the possibility that the index will move to the next resistance zone of 1,537 points. 

On the contrary, if the benchmark breaks the support zone of 1,470 points first, there is a risk of a correction to fall back to a range of 1,425 - 1,400 points. VNS