Tech group FPT Corporation staff in Đà Nẵng. The company shares gained total 4.7 per cent last week. — VNA/VNS Photo Văn Dũng

 HÀ NỘI — The market will struggle in the coming days as the third-quarter earnings season is near its end and investors will try to realise their profits following recent rallies.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange finished last week at 940.30 points, marking its highest level since February 2020.

Despite some difficulties, the market was driven by the growth of banks, consumer firms and information-technology companies.

The banking sector expanded a total of 4.9 per cent last week with strong gains posted by Vietinbank (CTG), Techcombank (TCB), Asia Commercial Bank (ACB) and VPBank (VPB).

The banking sector was followed by the information and technology sector (up 3.0 per cent), consumer sector (up 1.9 per cent), materials (up 1 per cent) and utilities (up 0.5 per cent).

The IT and consumer industries were boosted by the large-cap firms FPT (FPT) and Masan (MSN), which gained total 4.7 per cent and 17.5 per cent, respectively.

On the opposite side, medicals and pharmaceuticals, services, industrials and oil and gas were four of the sectors that weighed on the market.

Despite the market growth, securities firms and analysts are getting pessimistic about the market’s short term trend.

The VN-Index has kept its rally up for two and a half months and returned to its pre-pandemic level of 943 points.

“The market valuation is not cheap anymore, with the price-to-earnings per share (P/E) ratio at 14.5, therefore, gaining stocks will be targeted by investors that are hungry for profits,” Đinh Quang Hinh, director of macroeconomics and market strategy at VNDirect Securities Corp, told Việt Nam News.

“Profit-taking will mount in coming days and the VN-Index may struggle in the range of 940-950 points,” he said.

“Some large-cap stocks have suffered stronger profit taking but in the long term, the large-cap sector will still be very attractive, such as banks, securities firms, consumer companies and retailers amid the releases of third-quarter earnings reports,” Hinh said.

Sài Gòn-Hà Nội Securities (SHS) said in its weekly note that the benchmark VN-Index has made gains in the last five straight weeks and the HNX-Index has rallied for 11 consecutive weeks.

“But trading liquidity, excluding put-through transactions, weakened to indicate the purchasing power is lessening,” the company said.

Both Vietnamese and international markets have returned to their pre-pandemic levels, the company said. “For Vietnamese stocks, there is very little room for further growth.”

In addition, fear is growing among derivatives investors about the short-term outlook of the market after the VN30 futures due on November 19 closed last week lower than the large-cap index VN30, the company said.

Large-cap tracker VN30 ended last week at 901.59 points while the VN30 futures due on November 19 finished at 895.10 points.

Local stocks will still be divided on investors’ earnings expectations, especially when all listed companies will have to finalise and submit their quarterly earnings reports to the market regulators by October 21, the company said.

Huge cash availability and upbeat sentiment are the two main reasons that have kept the market rally, Phan Dũng Khánh, director of investment consultancy at Maybank Kim Eng Việt Nam Securities, told tinnhanhchungkhoan.vn.

The two factors help absorb the stocks dumped by investors’ selling and they will continue lifting the market in the short term, he said.

“But in the long term, if there is not a necessary correction for local stocks amid the lack of good news on both international and local markets, there will be steep decline,” he warned.

The Vietnamese market is being driven by large-cap stocks only and that will do no harm to the market in the short term, Khánh added.

“In medium term, such growth is unsustainable,” he said. — VNS