Second-quarter and half-year earnings reports, as well as annual shareholder meetings, may be driving factors for a recovery of Vietnamese shares in June, starting this week.— VNA/VNS Photo

HÀ NỘI — Second-quarter and half-year earnings reports, as well as annual shareholder meetings, may be driving factors for a recovery of Vietnamese shares in June, starting this week.

The benchmark VN Index on the HCM Stock Exchange gained 2.23 per cent, or 21.62 points last Friday to close last week at 992.87 points, totaling a two-day increase of 4.67 per cent or 44.37 points.

After tumbling in the first trading session last Monday, the VN Index recovered strongly in three of the following four sessions to post a weekly growth of 3 per cent, marking its first gaining week after two weeks of losses.

Last Friday, the minor HNX Index on the Hà Nội Stock Exchange advanced 0.73 per cent to end last week at 115.75 points, up 3.62 per cent after two sessions. The northern market index rose 1.1 per cent from the previous week’s ending level.

An average of more than 238.2 million shares were traded in each session last week, worth VNĐ6.3 trillion (US$280 million), up 22.7 per cent in volume and 20.5 per cent in value, compared to the previous trading week.

Last week’s recovery of local stocks was attributed to strong growth of financial-banking industries, which received strong bottom-fishing purchases after having made significant declines since the VN Index hit its all-time high of 1,200 points on April 9. Those shares are also expected to lead the markets up in the near future.

According to securities firms, the last two-day recovery signals further positive movement for local stocks, which may be supported by better investor sentiment, despite the volatility of global markets caused by rising economic-geographical tensions.

One of the main reasons for their confidence in the market’s recovery is the expectation that investors will look for opportunities after the markets have seen wide and strong reductions in share prices since early April.

According to Saigon Securities Inc, after the VN Index had lost nearly 23 per cent of it value, and shares had been on a downtrend since April, the price-to-earnings (P/E) ratio of the VN Index was down to 17.6 by May 28, or 16.1 if the newly-listed property firm Vinhomes shares are excluded – which was level to the ratio seen in the first half of 2017.

Another factor that could cushion stock prices this week, in particular, and in June, are the annual shareholder meetings and expected improvements in the second-quarter and first-half earnings, to be reported soon.

Vingroup’s retail arm, Vincom Retail (HOSE: VRE), one of the largest companies by market capitalisation, plans to hold its annual shareholder meeting on June 7. It is expected to propose annual growth rates of 45 per cent and 23 per cent in its total revenues and post-tax profits for 2018, respectively, as well as target opening additional shopping centres in Hà Nội and HCM City.

In the first quarter of the year, Vincom Retail posted VNĐ1.6 trillion in revenues and VNĐ541.5 billion in post-tax profits, fulfilling 20 per cent and 21.7 per cent of its full-year earnings targets.

Meanwhile, the banking sector is to receive another bank stock, Techcombank (HOSE: TCB), to be listed on the HCM Stock Exchange today with a market capitalisation of some $6.5 billion. It is expected to provide an additional boost to the market.

Most of the listed banks saw a positive growth in earnings in the first quarter of 2018, fulfilling 25-30 per cent of their full-year earnings targets. They are expected to remain firm in the second quarter thanks to positive macroeconomic conditions, stable lending rates and growth of borrowing demand, tinnhanhchungkhoan.vn reported.

Energy, gas and oil firms are also among stocks that could live up to investors’ expectations as they benefit from higher oil prices. By May 29, West Texas Intermediate’s (WTI) price had increased by 10.8 per cent since the start of the year, while Brent crude rose 12.8 per cent.

“The recovery of the market, the improvement of liquidity and the balance of foreign trade are good news for the overall market’s outlook,” Bao Viet Securities Co (BVSC) said in its weekly report.

“The rise of liquidity is a positive signal for the market’s uptrend” and with positive market breadth, “investors are optimistic about the market’s uptrend in the short term.” — VNS