|Investors trace market fluctuations at VNDirect stock trading floor in Ha Noi. — VNS Photo Viet Thanh
HA NOI (VNS) — Vietnamese shares may recover slightly this week, starting with an increase on Monday, as the VN Index is expected to reach its bottom line from last week with strong support in the range of 550-560 points, Maritime Securities Incorporate (MSI) wrote in its weekly forecast.
Some leading stocks expected to rise on the VN Index include FPT Corporation (FPT), Thanh Cong Textile Garment Investment Trading JSC (TCM) and Gemadept Corporation (GMD), MSI said.
That forecast came after the national stock market made gains on both local exchanges on Friday, led by two listed banks – Sacombank (STB) and Eximbank (EIB), though investors remained cautious, with their investments ahead of the US central bank's meeting this week, the brokerage firm said.
The US central bank will hold a meeting this week to decide whether to raise interest rates.
A rate hike will strengthen the US dollar against other currencies, including the Vietnamese dong, and force other central banks to devalue their currencies to remain competitive on global financial markets.
However, the US central bank will be confronted by problems, such as the Chinese yuan having fallen to its lowest value against the dollar in the last four and a half years after it was added to the International Monetary Fund's reserve basket.
The unstable relationship between the US dollar and the Chinese yuan will put pressure on Viet Nam to devalue the dong to ensure its competitiveness against these two currencies and guarantee competitiveness for the country's exports and companies.
Further, the devaluation of the dong will hurt profits of the nation's banks and raise input costs for local producers, as they have to spend more importing production materials from overseas suppliers.
However, the devaluation of the dong will also benefit local exporters, as their products will become more competitive on the global market with lower prices, compared to US-made and China-made products.
Last week, the benchmark VN Index on the HCM Stock Exchange and the HNX Index on the Ha Noi Stock Exchange each rose 0.4 per cent to close the week at 563.43 points and 79.22 points, respectively.
Overall, the southern index fell 1.4 per cent and the northern index dropped 1.2 per cent from the previous week.
Two leading sectors, the banking sector and energy sector, led the market decline. Energy firms, such as PetroVietnam Gas Corporation (GAS) fell 4.7 per cent over the week and PetroVietnam Drilling and Well Services (PVD) lost 7.4 per cent after the US benchmark crude West Texas Intermediate (WTI) fell to near the seven-year low at US$36.76 per barrel on Thursday.
Meanwhile, the largest banks also declined from previous weeks. Vietcombank (VCB) was down 2.4 per cent over the week and the Bank for Investment and Development of Viet Nam (BID) decreased 3.4 per cent.
However, insurers and plastic producers saw gains last week. The biggest insurer, Bao Viet Holdings (BVH), gained 3 per cent over the week, while plastic firms such as Binh Minh Plastic JSC (BMP) rose 3.1 per cent and Tien Phong Plastic JSC (NTP) was up 1.5 per cent.
The national stock market last week traded more than 145 million shares per day, worth VND2.2 trillion ($97 million), a decrease of 6.4 per cent in trading volume and 4.9 per cent in trading value from the previous week. — VNS