A fertiliser production line of the PetroVietnam Fertiliser and Chemicals Corp (DPM).  DPM was among the market's supporters last week. — VNA/VNS Photo Huy Hùng

 HÀ NỘI — Vietnamese shares are widely expected to increase and hit new highs this week but the growth may be modest on weak market sentiment.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange gained total 0.47 per cent to finish last week at 854.78 points.

Since the second wave of coronavirus broke out in Việt Nam one month ago, the VN-Index has increased by total 8.86 per cent to recoup almost all of its loss.

The benchmark may move up to test the range of 860-877 points this week, securities firms forecast.

“Though the market rally has expanded for a third week (with the total growth of 7.06 per cent), the daily growth is narrowing and liquidity remained lower than the 20-week average,” Sài Gòn-Hà Nội Securities (SHS) said in its weekly report.

“That proves the purchasing power is weakening,” the company said.

“The market’s short-term signal is still positive but any big jump is not expected at the moment,” SHS said.

The market has a chance to break from its consolidation, which has been kept in the last two weeks around 850 points, but the growth could be modest, MB Securities Co (MBS) said in a note.

“The VN-Index may end its sideways movement in the coming week and rise towards 877 points thanks to increased market trading value and the expansion of bank stocks,” the company forecast.

The sector index advanced total 1.7 per cent during the week, equal to information and technology industry but lower than other industries such as materials, medicals and pharmaceuticals, and industrials.

But as the most heavyweight sector, bank stocks gave the market a boost last week to conquer the resistance of 850 points.

The biggest gaining bank stocks included Vietcombank (VCB), Vietinbank (CTG), VPBank (VPB), Techcombank (TCB), Asia Commercial Bank (ACB) and Sài Gòn-Hà Nội Bank (SHB).

The material and pharmaceutical sectors were driven by steel companies Hoa Sen (HSG), Nam Kim Steel (NKG), DHG Pharmaceuticals (DHG), PetroVietnam Fertiliser and Chemicals Corp (DPM), and PetroVietnam Cà Mau Fertiliser (DCM).

Foreign investors net-bought a total of nearly VNĐ670 billion worth of local shares last week, which was a big improvement compared to a net-sell of more than VNĐ846 billion in the previous week.

However, the figure was attributed to foreign investors’ net buying of Vinhomes shares (VHM) on August 20, which was worth VNĐ1.7 trillion.

If the foreign purchase of Vinhomes shares was excluded, foreign investors actually net-sold about VNĐ1 trillion on the stock market last week.

Đào Tuấn Trung, director of analysis at Vietinbank Securities Co, said that the market has now entered a period in which both economic and business news is not strong enough to lift the market.

Listed firms have finished their earnings reporting season and the prolonged, unpredictable COVID-19 pandemic may weigh on investor confidence, he said.

However, there will be a chance for local shares to be re-valued in the coming weeks as bad news has been priced in, and investors will be able to scoop in cheaper assets, he added.

In the coming week, both international and domestic markets will look forward to the US central bank’s meeting on Thursday when the Federal Reserve chairman Jerome Powell will deliver a speech, addressing how its financial and fiscal policies will go in the remaining months of the year.

The global economy and US economy in particular have been ravaged by the COVID-19 pandemic. The total number of infection cases worldwide as of Sunday was nearly 23.4 million and the US topped the chart with more than 5.8 million people having tested positive. — VNS