Shares enter sideways state with low liquidity

March 27, 2023 - 09:39

Investors are likely to have few opportunities to disburse when the market is entering a sideways state with low liquidity, said brokerages.


Novaland's office in An Phú Ward, District 2, HCM City. NVL was up 3.5 per cent last week. Photo

HÀ NỘI Investors are likely to have few opportunities to disburse when the market is entering a sideways state with low liquidity, said brokerages.

On the Hồ Chí Minh Stock Exchange, the VN-Index rose 0.16 per cent to close Friday at 1,046.79 points.

The index had risen 0.16 per cent last week.

An average of 502.4 million shares were traded on the southern exchange during each session last week, worth VNĐ8.8 trillion (US$374 million).

The trend of accumulation is a reasonable trend in the current period because after a period of strong downtrend, the market has experienced a technical recovery phase since the beginning of this year and it is heading towards the balance area to accumulate, said Saigon-Hanoi Securities Co (SHS).

"In the past 6 weeks, VN-Index has changed very little, the trading volume is also decreasing, which are typical signals of the accumulation process," said SHS.

According to SHS, in the short term, there are not many opportunities to disburse when the market is entering a sideways state. Sideways is a state that occurs when securities prices move within a stable range, without forming a specific trend.

With low liquidity, although the risk of volatility is not high, the short-term upside opportunity is insignificant. However, the accumulation period is a good opportunity for medium and long-term investors when good stocks have been discounted to attractive prices after the recent downtrend period.

This analysis group recommend that medium- and long-term investors can continue to gradually disburse to increase their holding proportion to prepare for a new uptrend after this accumulation period. With good fundamentals, stocks with stable growth potential are moving in the current accumulation state.

From a technical point of view, Vietcombank Securities Co (VCBS) said that with the current situation, investors should closely observe the market at the point range from 1,035 - 1,040. If there is good accumulation and the cash flow increases again, they can disburse money in industry groups such as oil and gas, securities, and real estate. At the same time, it is necessary to keep a careful approach at the moment and limit early disbursement when there is no clear increase in cash flow.

The VN-Index will continue to fluctuate in a narrow range from 1,030 to 1,070 points this week. In the context that the market has not formed a clear uptrend, buying and holding stocks should only be done with a long-term vision, from 6 months to one year.

Meanwhile, short-term trading faces high risks and is only suitable for professional investors. At the same time, portfolio management should still be a top priority. Investors should maintain a moderate proportion of stocks and limiting the use of leverage at the current stage to control risks.

According to Quang Hinh, Head of Macro Policy and Analysis Department of VNDIRECT Securities Joint Stock Company (VNDIRECT), the real estate industry witnessed a positive trading week last week thanks to the news that CapitaLand Group (CapitaLand) - one of Asia's largest diversified real estate groups with headquarters in Singapore, had negotiate to buy Vinhomes' projects. The real estate stock's rally was led by Vinhomes (VHM), up 13 per cent, followed by Novaland (NVL) up 3.5 per cent, Nam Long Group (NLG) up 4.4 per cent and Đất Xanh Group (DXG), up 1.3 per cent. VNS