HÀ NỘI – Vietnamese shares may decline this week as investors reap profits from a five-day rally aided by unchanged US and Japanese interest rates, securities firms said.

“A five-day rally has helped the benchmark VN Index approach the resistant range of 675 and 680 points,” according to Bảo Việt Securities Corp (BVSC).

The VN Index on the HCM Stock Exchange ended Friday’s session at 674.09 points. The benchmark index rallied in all five trading days of last week to jump 3.5 per cent from the previous trading week.

The HNX Index on the smaller Hà Nội Stock Exchange finished last week’s trading at 83.32 points. The northern market index also made a five-day gain of 1.2 per cent over a week.

Market trading liquidity increased on both local exchanges with an average of more than 180.2 million shares worth VNĐ3.85 trillion (US$172.6 million) being traded in each session.

“The pressure caused by a profit-taking trend will likely increase on the local market, and this could be an appropriate moment for investors to trade for short-term profits with the stocks being bought last week,” BVSC said.

Last week’s trading figures are nearly 10.25 per cent higher than those of the previous week.

“The five-day rally last week was largely caused by better investor confidence, which was lifted after exchange-traded funds (ETFs) ended their third-quarter reviews on investment portfolios and the US and Japan central banks decided to keep interest rates unchanged.

“Foreign investors returning to be net buyers also had a positive effect on domestic traders and the stock market,” BVSC added.

Foreign investors recorded a net buy value of VNĐ418.6 billion last week after selling a net value of more than VNĐ3.3 trillion during the previous six weeks.

Higher investor confidence lifted large-cap stocks, which had fallen strongly during the third-quarter review of ETFs’ portfolios. Those included property and real estate giant Vingroup JSC (VIC), consumer goods producer Masan Group (MSN), Vietcombank (VCB) and insurer Bảo Việt Holdings (BVH).

VIC rose 3.1 per cent in the last four trading days of the week after falling on profit-taking on Monday, MSN jumped 9.2 per cent last week, financial stocks VCB and BVH advanced 6.9 per cent and 11.8 per cent, respectively.

“The recovery of oil prices last week was another factor that helped improve market sentiment,” BVSC said, warning investors that analysts predict this week’s meeting between the world’s top oil exporters in Algeria may not conclude with an agreement to cut production.

Such a gloomy scenario and profit taking pulled London-traded Brent crude down 3.7 per cent to finish the week at $45.89 a barrel after rising 4.1 per cent in the previous four sessions.

A plunge in oil prices could lead to a sell-off in local oil and energy stocks and pull them down sharply, especially PetroVietnam Gas Corp (GAS) and PetroVietnam Mud Drilling Corp (PVC) that were up 4.1 per cent and 2.7 per cent last week.

On the positive side, investors may look forward to third-quarter business results from listed companies, Lê Nguyệt Ánh, Chief Financial Analyst at Asia Commercial Bank Securities Co (ACBS), said.

“Consumer goods producers, construction firms and real estate developers are expected to provide higher numbers than their second-quarter performances,” Ánh said. – VNS