HÀ NỘI – Vietnamese shares may decline this week, as blue chips could run into profit taking and macro-economic conditions might not be strong enough to drive markets up, analysts warned.

In general, both local markets ended the last trading week higher from the previous one, beating earlier analysts’ expectations on a negative trading trend.

The benchmark VN Index on the HCM Stock Exchange on Friday inched down 0.2 per cent to finish the week at 621.88 points after a five-day rally of 3.1 per cent, but recorded an increase of 2.3 per cent in one week.

The HNX Index on the Hà Nội Stock Exchange was up 0.3 per cent on Friday, to end at 82.66 points, rising 2 per cent in the last six sessions and posting a weekly gain of 1.6 per cent.

The decline in the benchmark VN Index on Friday signaled a possible decline, as it might become risky for investors to purchase rising stocks, Lê Đức Khánh, Maritime Securities Inc’s analyst said.

Meanwhile, large-cap stocks, such as banks and property developers, have shown signs of declining recently, as investors tried to choose profits from these stocks, Nguyễn Xuân Bình, Bảo Việt Securities Corp’s market analyst said.

It will be challenging for the markets’ to gain if there are no other stocks that take the lead to drive the markets up, Bình noted.

Banks and property firms last week were the centre of attention, after they were boosted by Circular 06, which was issued on May 27 by the central bank as an amendment to Circular 36, regulating prudential ratios for the operation of credit institutions and foreign branches. The new circular eased investors’ concerns over a capital shortage and was considered “less fierce than expected”.

Additionally, the central bank proposed that the Government extend financing for credit contracts signed before March between commercial banks and customers to buy, rent or repair houses until the end of this year. The extended housing stimulus package is worth VNĐ32.8 trillion (US$1.45 billion).

Medium- and small-cap stocks have attracted a lot of attention from investors, which also means that local markets have not received information from the macro-economy that is strong enough to boost investors’ confidence, Nguyễn Ngọc Lan, Agribank Securities Corp’s analyst said.

Investors this week will turn their focus to whether the US central bank will raise its interest rates for the first time this year, given the latest disappointing economic data and possible challenges from the withdrawal of Britain from the European Union.

The chance for a US interest rate increase in June has declined and has bolstered foreign investors’ confidence in local assets. Last week, foreign investors recorded a net buying value of nearly VNĐ430 billion.

However, disappointing US economic data also raised concerns over the slow recovery of the global economy and could have an impact on global markets, including Việt Nam, and put pressure on local central banks to create monetary policies to protect domestic products.

Last week, the daily reference mid-point rate for the exchange trading band set by Việt Nam’s central bank hit the highest value of this year at VNĐ21,946 per US dollar, proving that the country is prepared for a US interest rate increase this month.

Energy stocks could also drag markets down following the unsuccessful OPEC meeting on Thursday to reach agreement on production ceilings. However, the decline in energy stocks may not be critical, as key OPEC members still maintained an optimistic outlook for the markets.

Last week, both local markets traded a daily average of nearly 179 million shares, worth almost VNĐ2.66 trillion. – VNS