Investors' risk appetite continues to improve this week

August 08, 2022 - 09:58
Liquidity improved significantly last week and has now exceeded the recent 20-week average. This marked the second week of the event, showing that investor interest is improving.
A trader observing the market's movements on his computer. Photo

HÀ NỘI — After hitting a bottom of around 1,140 points in early July, the stock market had recovered for four straight sessions, with the benchmark VN-Index surpassing the threshold of 1,250 points.

Notably, liquidity improved significantly last week and has now exceeded the recent 20-week average. This marked the second week of such an increase, showing that investors' interest is improving.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index ended the week at 1,252.74 points, down 0.11 per cent. Meanwhile, the HNX-Index on the Hà Nội Stock Exchange (HNX) closed higher, up 0.73 per cent to 299.9 points.

For the week, the VN-Index rose by 3.85 per cent and the HNX-Index was up 3.91 per cent. 

Trading value on HOSE increased by 39.2 per cent from the previous week to VNĐ83.1 trillion (US$3.5 billion), equivalent to a gain of 47 per cent in volume to more than 3.5 billion shares.

On the northern bourse, the trading value climbed by 29.6 per cent to nearly VNĐ9.2 trillion, equal to the trading volume of 472 million shares, up 47.1 per cent. 

Foreign investors continued to be net buyers in the market last week with a net value of over VNĐ1.5 trillion on the two main exchanges.

According to Saigon - Hanoi Securities JSC (SHS), groups of stocks that have fallen sharply in the past such as banking, securities and steel, rebounded last week, leading the market generally higher.

With four gaining sessions at the beginning of the week and only a slight correction at the end of the week, selling pressure was not strong.

Therefore, the short-term trend of the market is still positive and the VN-Index may head to the next resistance zone of 1,260-1,285 points in the near future.

From a medium and long-term perspective, the market is still forming an accumulation zone on the basis of low valuation compared to the average of many years as economic growth is maintained, thereby creating many selective investment opportunities.

Investors can consider selectively disbursing and accumulating stocks with growth prospects, prioritising ticker symbols that still have positive business results in the second quarter of 2022, and attract rising short-term cash flow, said SHS.

Similarly, MB Securities JSC (MBS) said that despite losing points in the last session of the week, the market still set the fourth consecutive weekly of gains, its longest rising streak in more than a year.

The liquidity which edges higher from the bottom, provides support for the market's recovery, even in the scenario where the market is under the pressure of profit taking or correction.

Technically, the resistance zone of 1,250-1,262 points will continue to be a challenge for the market benchmark this week, if the liquidity stays in the area of ​​VNĐ13.5-15 trillion.

Regarding macro factors, Việt Dragon Securities Corporation (VDSC) sees some positive signals about the possibility of cooling down of global inflation in July's data, as the indices of oil prices, general commodity prices and goods circulation all tended to improve positively compared to June.

VDSC also believes that this will be the most positive information to support the VN-Index in August. As inflation is expected to cool down if oil prices remain stable, or tend to decrease during the period, the US Federal Reserve will have room to review the level and roadmap of raising interest rates to better support economic recovery.

In the domestic market, the credit growth target remains at 14 per cent for the whole of 2022 set by the State Bank in order to stabilise domestic interest rates and exchange rates, VDSC added.

The securities firm expects the VN-Index will fluctuate in the range of 1,200-1,300 points in August. 

Investors can disburse part of the portfolio for a short-term strategy and still prioritise keeping a certain amount of cash for a long-term investment strategy when the information supporting industry groups gradually becomes clearer. VNS