HÀ NỘI — Vietnamese shares will continue to rise this week, according to securities analysts and brokerage companies, as foreign investors buy local assets. Positive first-quarter earnings reports and macroeconomic indicators to be released soon are also expected to influence this trend.

On Friday, the benchmark VN-Index on the HCM Stock Exchange edged up 0.4 per cent to close at 722.14 points, reaching a fresh ten-year high. The southern market index has gained a total of 1.3 per cent in the last two days.

The HNX-Index on the Hà Nội Stock Exchange advanced 1.6 per cent, the highest daily growth since January 3, to end at 91.37 points. The northern market index has increased by a total of 1.8 per cent in the past two sessions.

Friday’s gains also helped the VN and HNX Index finish up 1.6 per cent and 3.4 per cent, respectively, compared to the previous week’s closing levels.

Nearly 272.3 million shares were traded in each session last week, worth VNĐ5.1 trillion (US$226.8 million). Daily average trading liquidity rose from the previous week’s figures by 23.6 per cent in trading volume and 13.5 per cent in trading value.

According to securities analysts, positive foreign investor confidence in local stocks was the major factor that lifted the benchmark VN Index across the challenging level of 720 points.

Foreign investors last week recorded a net buy value of more than VNĐ1 trillion, 5.2 times the previous trading week’s figure. On the HCM Stock Exchange, foreign investors have a net buy value of VNĐ1.2 trillion so far in March.

“Foreign investors do not seem too concerned about the US Fed’s interest rate increases as they were when the previous rate hikes were made,” said Trần Xuân Bách, an analyst at Bảo Việt Securities Company. “They have gotten used to those rate hikes. They have reacted and made moves in advance in order to prepare for the Fed’s rate increases at the end of each quarter.”

“Therefore, if nothing happens unexpectedly, the next two rate hikes will not have negative impacts on foreign investment in Việt Nam’s securities market.”

The VN Index will also receive support from large-cap companies that are expected to provide good earnings reports for the first quarter of 2017, according to Nguyễn Ngọc Lan, head of brokerage division at Agribank Securities Company.

For example, bank stocks trading liquidity increased strongly in the past week, Lan said. “Normally, the trending of bank stocks will last long and have widespread positive impacts on the stock market, therefore, local stocks will maintain positive growth in the short-term ahead,” he added.

Last week, bank stocks had impressive performances. Vietcombank (VCB) rose total 2.7 per cent after five sessions, Asia Commercial Bank (ACB) jumped 8.1 per cent, Sài Gòn-Hà Nội Bank (SHB) soared 7.8 per cent, and Sacombank (STB) gained 10.7 per cent.

Positive gains were also recorded in other large-cap stocks, such as dairy producer Vinamilk (VNM), consumer goods producer Masan Group (MSN), PetroVietnam Gas Corp (GAS) and Faros Construction Corp (ROS).

However, there are slight concerns over a chance the stock market could decline on profit-taking, which targets strongly-increased shares, and the re-allocation of investment among local assets.

“Investors could seek for possible profits in penny stocks as the increase of those share prices is not related to the improvement of those companies’ core businesses,” said Nguyễn Hữu Bình, head of analysis division at International Vietnam Securities Company.

According to Viet Capital Securities Company, investors tended to switch their attentions from mid-cap and small-cap stocks to blue chips and large-cap stocks, resulting in the decline of the VNMidcap Index.

The brokerage firm forecast that as small-cap and mid-cap stocks would suffer from the re-allocation of investment, there is a chance the stock market could fall and test the short-term support range of 715-718 points. — VNS