HÀ NỘI – Vietnamese shares may continue to rise this week, as a difference in pricing between blue chips and speculative stocks, as well as prospects of solid third-quarter earnings reports, could keep investor confidence positive.

“The benchmark VN Index may maintain its upward swing to approach the testing range of 690-700 points this week,” Viet Capital Securities Co (VCSC) said in a note.

Speculative stocks would remain attractive to investors because “cautious investor sentiment has driven money to flow into small-cap stocks in the few last sessions”, helping the VNSmallcap Index close at above 810 points, VCSC said.

This is evidence that penny stocks, or the small-cap and mid-caps, will be able to draw attention from investors as they have found it “more difficult to make profits from investing in large-cap stocks,” said Vũ Minh Đức, an analyst at VCSC.

Both local exchange indexes struggled after a volatile trading week to end higher than the previous week’s closing, with dairy producer Vinamilk (VNM) and real estate firm Vingroup JSC (VIC) showing gains.

The benchmark VN Index on the HCM Stock Exchange rallied 1.9 per cent in the last four trading days to finish last week at 687 points, a weekly increase of 0.4 per cent.

Further, the HNX Index on the Hà Nội Stock Exchange saw a three-day increase of 1.1 per cent to end the week at 85.45 points, marking a slight week-on-week gain of 0.2 per cent.

Strong trading for speculative stocks also kept market liquidity stable, compared to the previous week, with more than 180.6 million shares exchanged each session, valued at VND3.05 trillion (US$135.5 million).

It was the increase in large-cap stocks that had driven market indexes up since the beginning of the year, and speculative stocks barely had risen, similar to the rise of the stock market, Đức said.

Therefore, there was a large difference in stock pricing between blue chips and speculative stocks, he said, adding that this difference triggered the flow of money into small-cap and mid-cap stocks, when investors saw opportunities for profit making.

In addition, investor confidence in speculative stocks was high because “those companies used to be big, but suffered from the financial and economic slowdown,” Nguyễn Hồng Khanh, head of market analysis at Sacombank Securities Company (SBSC), said.

“These companies have signaled their recovery thanks to strict restructuring policies, and are expected to make comebacks to their prosperity soon,” Khanh said.

The upcoming season for third-quarter earnings reports will remain the focus on the stock market, analysts said.

“Companies in plastic, steel, rubber and chemical industries are still expected to produce optimistic earnings reports for the third quarter, as the world’s commodities prices have trended upwards,” said Vũ Minh Đức, VCSC analyst.

Investors could also look to automobile manufacturers and dealers for a positive business third quarter, Đức said.

Nguyễn Hồng Khanh, analyst at SBSC, said that investors were now looking for stocks with prospects for good performances in the fourth quarter and next year.”

Some leading companies in the retail and food sectors, such as VNM, Mobile World Corp (MWG) and information technology corporation FPT (FPT), were forecast to have stable growth, while other real estate firms could record high profits for the fourth quarter, Khanh said. – VNS