Market to struggle around the 1,300-point threshold

April 15, 2024 - 08:29
The market is likely to continue recovering to the area of 1,280-1,300 points, but a risk of strong fluctuations remains as cash flows stay weak, said experts.
Investors watch the market's movements at the headquarters of HoSE. — VNA/VNS Photo

HÀ NỘI — The domestic stock market managed to log a weekly gain despite corrections during the week.

The market is likely to continue recovering to the area of 1,280-1,300 points, but a risk of strong fluctuations remains as cash flows stay weak, said experts.

On the Hồ Chí Minh Stock Exchange (HoSE), the benchmark VN-Index closed last week at 1,276.6 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) was last traded at 241.34 points.

For the week, the former increased 1.71 per cent and the latter was up 0.69 per cent.

The liquidity on the southern bourse reached over VNĐ94.8 trillion (US$3.8 billion), experiencing a significant decline of 25.4 per cent from the previous week.

The value was below the average level, indicating strong market differentiation and signalling the beginning of the evaluation phase for new business plans in 2024, as many companies are holding their 2024 shareholder meetings.

Market participants are also eagerly anticipating financial results of the first quarter of 2024.

Foreign investors continued to be net sellers on HoSE, although the level of net selling decreased from the previous week to VNĐ1.16 trillion. This marks a long streak of significant net selling by foreign investors on HoSE.

On the other hand, they showed a relatively good net buying trend on HNX, with a value of VNĐ202.24 billion.

According to BIDV Securities JSC, the market may continue its recovery towards the range of 1,280-1,300 points in the coming sessions. However, its liquidity remains weak, resulting in the potential risk of strong fluctuations.

Meanwhile, KB Securities Vietnam JSC (KBSC) said that the VN-Index experienced fluctuations in most of the morning session last Friday before gradually recovering and expanding its upward momentum towards the end of the session. The positive effect spread across large-cap stocks, opening up opportunities for a rebound in the index.

However, there is a high possibility that the VN-Index will face fluctuating pressure around the 1,300 range, an area where the index previously failed to sustain.

Investors are advised to avoid chasing purchases during the recovery phases and prioritise risk management in their portfolios, KBSC said, adding that they could allocate small investments around distant support levels.

Similarly, Vietcombank Securities said that the market showed signs of improvement last week after a strong correction. However, low liquidity suggests cautious participation of investors.

The securities firm advises investors to consider stocks in sectors like real estate, securities and banking, which show stable recovery signals and attract good cash flow.

Saigon - Hanoi Securities JSC (SHS) also recommends short-term investors consider disbursing their funds as the VN-Index has showed signs of upward momentum in recent sessions.

However, it notes that the 1,300-point resistance level remains strong, cautioning against chasing purchases when the index approaches this threshold.

For medium and long-term investors, SHS said they could allocate additional capital, but with a patient approach, waiting for a more stable accumulation phase.

Vietnam Construction Securities JSC (CSI) remains cautious and advises against chasing purchases, instead prioritising selling positions as the VN-Index approaches the strong resistance level of 1,317 points this week. — VNS