Hòa Phát Steel Plant at Phố NốI A Industrial Park in the northern province of Hưng Yên. The company's shares fell a total of 3.36 per cent last week. - Photo hoaphat.com.vn

HÀ NỘI – With less bad news expected in the short term and market sentiment stabilised, Vietnamese shares are widely expected to climb next week but growth will be moderate.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange rose 0.44 per cent on Friday to end last week at 956.41 points.

The benchmark gained a total  0.55 per cent in the last two trading days of the week, but lost 1 per cent overall during the week.

The market was dragged down by foreign investors and securities firms, according to BIDV Securities Corp (BSC).

Foreign investors net-sold local stocks in a week when exchange-traded funds (ETFs) finished reviewing their investment portfolios.

Foreign investors last week posted total net sales of VNĐ94.5 billion (US$4 million), hitting the likes of multi-sector firm Vingroup (VIC), Vietjet (VJC), consumer conglomerate Masan (MSN) and steel producer Hòa Phát (HPG).

The four large-cap stocks finished down between 0.2 per cent and 5.2 per cent last week.

Brokerage firms were active with proprietary trading as they looked for profits from the maturity of VN30 futures on the derivatives market.

They sold a total net value of VNĐ205 billion in local assets. The VN30 futures VN30F1912 matured on Thursday, closing at 861.20 points.

Pressure from foreign investors and securities firms forced a number of local stocks and the VN-Index down to near support levels, BSC said in its weekly review. For the VN-Index, it was 950 points.

But the benchmark did not break any further and the 950 point level proved to be the short-term bottom for the VN-Index, BSC said.

Purchasing demand picked up at around 950 points and investors “may consider buying shares in the next trading days,” BSC said.

Analysts are also optimistic that the Vietnamese stock market will gain slightly in the coming week.

The Vietnamese stock market has been performing comparatively worse than international markets, VNDirect Securities Corp’s investment director Nguyễn Trung Du told tinnhanhchungkhoan.vn.

Selling pressure was the main cause for the slide of the VN-Index from near 1,025 points to 950 points in the last one month, Du said.

But now some of the large-cap stocks had found their short-term bottom and would stabilise and recover this week, he said.

“The way I see it, the VN-Index is unlikely to fall to 940 points and it will make a slight recovery in the coming week.”

Penny still risky

The decline of large-cap stocks over the last one month was the main cause for the underperformance of the stock market, however, it allowed investors to look for opportunities in small-cap shares, according to Du.

“It is no surprise that the capital flowed into new opportunities, even small ones, when large-caps are on the downtrend,” Du said.

Investors were easily drawn to small companies’ shares not for their technical signs but for their business outlooks, he said.

Most small-cap companies were incapable of making giant leaps in performance and the growth of their stocks would only mean more risks and losses for investors, Du added.

Rising interest in penny stocks was the main drive for market trading liquidity last week.

“It should be worrisome for many investors,” Nguyễn Hồng Khanh, market analyst at Vietnam International Securities Co, said.

“Small-cap or penny stocks are speculative investments rather than long-term targets,” he said.

“Only companies with good performance will see their shares go up in a stable manner.”

In the next few days, the markers would be largely diverged or differentiated, so many penny stocks that made strong gains would return to their “real” prices, he said. – VNS