Brokerages forecast shares to rise while experts brace for corrections

August 31, 2020 - 08:33
While brokerages are forecasting shares to climb higher this week, market experts expect they will correct first before advancing to the next support zone.


A customer buys petrol at a petrol station. The Việt Nam National Petroleum Group (PLX). PLX was among the supporters of the VN-Index last week. — VNA/VNS Photo Trần Việt

HÀ NỘI — While brokerages are forecasting shares to climb higher this week, market experts expect they will correct first before advancing to the next support zone.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange gained 0.49 per cent to end Friday at 878.98 points.

The index had climbed 2.83 per cent last week.

An average of 371.4 million shares were traded during each session on the southern market last week, worth VNĐ371.4 million.

“The Việt Nam’s stock market rose for the fourth consecutive week last week with liquidity staying higher than the 20-week average, showing that the cash flow has returned to the market,” said Sài Gòn-Hà Nội Securities Company (SHS).

“VN-Index has surpassed the important resistance of 870 points, thereby opening up plenty room for the next increase to the 895-900 point range in the following week,” SHS said.

Sharing the same view, MB Securities JSC (MBS) said that domestic cash flow had strongly supported the VN-Index to surpass the peak of July despite foreign net selling.

“Technically, the uptrend is strengthening and the cash flow has shifted towards blue-chips,” MBS said.

BIDV Securities Joint Stock Company (BSC), meanwhile, said the market is likely to see corrections in the next few sessions before continuing the upturn momentum.

“The market is forecast to experience a correction early next week. The index could possibly retest support 860-868 points,” said Trần Xuân Bách, a stock analyst at Bảo Việt Securities Co.

“After a significant increase from 780-800 points, the index has been approaching strong resistance when various stocks have become overbought. This movement could possibly lead to the market’s strong volatility and correction during this period,” Bách said.

“Stock exposure should be maintained at 50 per cent of the portfolio,” he said.

“Investors with high stock exposure may consider selling part of the short-term positions. Those who have sold at 878-883 points should stay outside the market,” he said.

During the past week, stocks with the most positive influence on the VN-Index were real estate giant Vingroup (VIC), Việt Nam National Petroleum Group (PLX) and dairy firm Vinamilk (VNM).

Stocks that weighed down on the index were Vinhomes (VHM), Travel Investment And Seafood Development Corporation (DAT) and Hoàng Anh Gia Lai Agricultural JSC (HNG).

According to Sài Gòn-Hà Nội Securities Joint Stock Company, most of the major stock groups performed well such as oil and gas, rising 11.2 per cent, thanks to the rally of the Việt Nam National Petroleum Group, rising 12.4 per cent, PetroViet Nam Coating JSC (PVB), climbing 10.5 per cent, PetroVietnam Drilling & Well Services Corporation (PVD), up 6.7 per cent, PetroVietnam Technical Services Corporation (PVS), climbing 4.1 per cent, PetroVietnam Oil Corporation (OIL), rising 3.9 per cent and Bình Sơn Refining and Petrochemical Company Limited (BSR), up 1.5 per cent.

Information and technology groups increased by 4.9 per cent, followed by banking which grew 2.9 per cent.

Other groups such as consumer goods rose 2.7 per cent, medicine and healthcare climbed 2.5 per cent and community utilities gained 2.3 per cent.

Việt Nam's stock market gained strongly last week in the context of a strong rise in the world stock markets, with the US stock market indexes reached new records.

Wall Street shares continued their strong momentum on Friday session with the Dow Jones Industrial Average ring 0.67 per cent to 28,653.87 points, marking the sixth consecutive gaining session.

The S&P 500 index extended its rise for the seventh consecutive session as it advanced 0.7 per cent to a record level of 3,508.01 points.

Market sentiment cheered up on Friday following the keynote speech made by US’s Federal Reserve Chairman Jerome Powell, indicating the US central bank will keep low rates to possibly achieve higher inflation at the end of the year. — VNS