VN-Index likely to head toward 1,180-1,200 points this week

July 17, 2023 - 07:15
Experts said that positive news have lured previously-hesitant cash flows to join the market
Customers perform transactions at an office of Bảo Việt Securities Company in Hà Nội. — VNA/VNS Photo

HÀ NỘI — The Vietnamese stock market gained for the second week in a row, with the VN-Index hitting the highest so far this year. Experts said that positive news had lured previously-hesitant cash flows to join the market, helping the index easily surpass the threshold of 1,150 points.

On the Hồ Chí Minh Stock Exchange (HoSE), the benchmark closed last week at 1,168.4 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) was at 230.19 points.

For the week, the former rose 2,7 per cent and the latter increased 1.9 per cent.

Liquidity soared, with the average trading value of the whole market reaching over VNĐ21.8 trillion (US$923.4 million), up 21.7 per cent over the previous week.

Last week, foreign investors net sold more than VNĐ1 trillion on the southern bourse, a decrease of 45 per cent from the week before, while they bought VNĐ45 billion on HNX.

An expert from Saigon - Hanoi Securities Joint Stock Company (SHS) said that the market received positive information such as the adjustment of credit growth target by the State Bank of Việt Nam (SBV) on July 10.

The Government asked to continue to reduce lending interest rates by at least 1.5 - 2 per cent and required the SBV to focus and urgently deal with weak commercial banks, ensuring liquidity and safety of the system, and dealing with bad debts.

Also lifting the market sentiment, the US consumer price index (CPI) increased by 3 per cent year-on-year in June, the lowest since March 2021 and lower than experts' expectations.

SHS said the market's recovery momentum in the past two months has been very positive with good internal strength formed on a tight accumulation base.

As a result, SHS expects that the VN-Index will have many opportunities to form a new uptrend after breaking over the 1,150-point level.

The securities firm said that the more optimistic sentiment was reflected in the outstanding performances of the real estate stocks with surging liquidity, as Bà Rịa - Vũng Tàu House Development (HDC) jumped 17.43 per cent, Nam Long Investment Corporation (NLG) gained 15.49 per cent, and Phát Đạt Real Estate Development (PDR) rose 9.25 per cent.

Financial services and securities stocks also witnessed strong increases as liquidity improved and many announced optimistic business results in the second quarter, with VIX Securities (VIX) jumped 10.13 per cent, SSI Securities Corporation (SSI) was up 7.75 per cent, and SHS rose 6.57 per cent.

Meanwhile, analysts at VNDirect Securities Corporation said that the country’s stock market performed well, with five consecutive gaining sessions last week thanks to the weaker-than-expect inflation data in the US and easing pressure on the exchange rates.

The cooling US inflation spurred expectations that the US Federal Reserve would soon stop tightening the monetary policy.

Markets now expect Fed will raise interest rates for the last time in its next meeting on July 25-26, then keep rates unchanged at the peak of 5.25 - 5.5 per cent until the end of 2023.

The scenario is somewhat more positive than earlier, when many experts thought that the Fed may have more than one rate hike this year.

The global stock market moved positively after the data, and the dollar index dropped below 100 points, helping ease the pressure on the domestic exchange rate.

Thereby, domestic investors have been able to rest assured after the fluctuations of the domestic exchange rate in recent weeks, VNDirect said.

Domestically, the positive news lured the previously hesitant cash flows to join the market, easily pushing the VN-Index over 1,150 points.

The positive sentiment in the stock market may maintain this week and the VN-Index is likely to head toward the strong resistance zone of 1,180-1,200 points, the securities firm added. — VNS