Consumers shop at a Vinmart store in Hưng Yên Province. The retail industry is forecasted to grow as consumer activities show signs of a rebound after the ease of social distancing measures. — VNA/VNS Photo Phạm Kiên

HÀ NỘI — Brokerages have forecast that the benchmark VN-Index on the Hồ Chí Minh exchange may approach 900 points by the end of this year despite worries over a second wave of the coronavirus pandemic.

COVID-19 was still the decisive factor influencing the stock market, said KB Securities Vietnam Co (KBSV).

“The second wave of the pandemic will not take place in Việt Nam while it may return to some countries with less impact due to tighter containment.

“Based on this scenario, we are optimistic the market has experienced the lowest price area in March, the peak period of the pandemic,” the company said.

VNDirect Securities Company also said the second wave of COVID-19 could cloud the business prospects of listed firms, especially those operating in consumption.

On the positive side, VNDirect said cash flow from foreign investors, the State Bank lowering interest rates and the approval of free trade agreements could create a push for the stock market in the second half of the year.

"We estimate the profits of businesses will decrease by 5-6 per cent over the same period last year. The VN-Index could reach between 840-920 points by the end of this year," VNDirect said in its report.

According to KBSV, the two biggest uncertain variables are import-export activities and the influence of hard-hit service groups due to the shortage of international visitors.

“However, growth prospects this year may remain positive thanks to the promotion of public investment in the second half of the year and stimulus measures such as reducing interest rates and launching of subsequent support packages,” the company said.

KB Vietnam Securities has pinned hopes on stock groups of retail, information technology and thermal power sectors. Cash flow-attracting industries at present like ports, real estate and banks are forecast to stay neutral, while oil and gas are negatively rated. In the information and technology group, the main motivation will lie in software exports, the company said.

"COVID-19 is expected not to greatly affect the business results of software export businesses due to their ability to work from home and the rising demand for technology triggered by the need for solutions amid the pandemic”, KBSV said.

“The retail industry is forecast to grow as consumer activities show signs of a rebound after the easing of social distancing measures. Thermal power can benefit from increased power demand,” it said.

As for the real estate sector, KBSV said the disease outbreak had harmed buyer psychology and made firms more defensive. This affected the sales and absorption capacity of the market.

The banking industry would not see significant growth due to slow credit growth and profit margins being affected by business support programmes, KBSV said.

According to VNDirect, the second half of the year could be good for construction materials, which will be added by the acceleration of public investment and industrial real estate, benefiting from the shifting wave of investments and faster-than-expected recovering groups such as retail, technology, electricity and aviation.

VNDirect said beverages, insurance, real estate, retail and tourism were the most hard-hit sectors in the first half of the year by the pandemic. On the other side, banking and food were less affected, while chemicals, steel and telecommunications maintained a positive trend.

Fluctuate this week

“The market is forecast to fluctuate with alternative ups and downs in a narrow range early next week,” said Trần Xuân Bách, a stock analyst at Bảo Việt Securities Co.

“The VN-Index will continually receive support from 863-868 points. Overall, the market is expected to maintain its short-term recovery toward the resistance zone of 875-890 points.”

The HOSE will announce the restructure results of VN30, VNFinlead, VNDiamond today. Investment funds benchmarking these index baskets will have to conduct portfolio restructuring accordingly. This event may help spark stock movements in these index baskets during the last weeks of July, Bách said.

Last week, the benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HOSE) slumped 0.55 per cent to close Friday at 872.02 points.

The index had increased by 0.09 per cent last week.

An average of more than 251.5 million shares were traded on the southern market during each session last week, worth VNĐ4.3 trillion (US$185.5 million).

On the Hà Nội Stock Exchange (HNX), the HNX-Index was up 1.06 per cent to end Friday at 116.81 points.

The index had gained 0.99 per cent last week.

An average of 35.9 million shares were traded on the northern market during each session last week, worth VNĐ401 billion. — VNS