HÀ NỘI – Vietnamese stock indices may rise further and test their resistance levels this week on higher investor confidence, bolstered by positive developments in global political conditions and good earnings reports.

The benchmark VN-Index on the HCM Stock Exchange rose 0.2 per cent to close on Friday at 717.73 points. Việt Nam’s key index totalled a three-day rally of 1.4 per cent.

The HNX-Index on the Hà Nội Stock Exchange on Friday advanced 0.3 per cent to end at 89.54 points, extending its gain for a third session, with total growth of 1.9 per cent.

Daily average market trading liquidity decreased from the previous week’s level. More than 215.4 million shares were traded in each session, worth VNĐ4.25 trillion (US$189 million), down 6.6 per cent in trading volume and 13.6 per cent in trading value.

Given the current financial, economic and political conditions, the two local stock indices are expected to rise this week and approach the resistance level of 720 points for the VN-Index and 90 points for the HNX-Index, brokerage firms said in their weekly reports.

The current positive moves globally have encouraged foreign investors to buy more Vietnamese shares, boosting confidence among domestic investors on the market’s future prospects.

According to the Foreign Investment Agency of the Ministry of Planning and Investment, foreign investors have poured nearly $11 billion into Vietnamese assets in the last four months, an increase of 40.5 per cent year-on-year.

Of the total four-month foreign investment, a net $240 million was spent on purchasing Vietnamese shares. In April alone, foreign investors posted a net buy value of VNĐ2.25 trillion (nearly $100 million) on both local bourses.

According to Bảo Việt Securities (BVSC), the figures prove foreign investors remain highly confident about the Vietnamese market despite volatile global political and economic conditions in the first quarter.

The recent geo-political instability including the rising tensions on the Korean peninsula, the war in the Middle East and the presidential election in France dampened investor confidence in global markets.

BVSC, however, said investor confidence would improve this week as worries over North Korea’s nuclear test cooled and the French presidential election moved towards a positive result that indicated France would not leave the European Union.

A successful presidential election would help France “stay” in the EU and ease worries of global markets and investors over the “fall of the EU,” the BVSC said.

Foreign investors will remain in emerging markets, including Việt Nam, as they are worried about the feasibility of new Trump Administration policies, according to chief economist of Vina Capital Corporate Finance Việt Nam Ltd, Alan Pham.

Investors around the globe had expected the Trump Administration’s new policies would cut tax and result in massive investment in infrastructure, encouraging companies to return to the United States from emerging markets, Pham said.

However, following the first 100 days, investors remained in emerging markets, recognising that the new policies were not stable and somewhat risky, he said.

In addition, investor confidence was bolstered by the prospects of corporate earnings that will be fully revealed in a few weeks, according to BIDV Securities (BSC).

By the end of April, some 71 per cent of a total 702 listed firms on both local exchanges published their first-quarter earnings’ reports, posting total annual growth of 34 per cent compared with the first quarter of 2016. – VNS