An investor follows stock movement on computer screen. By the end of 2020, the VN-Index had increased by 142.88 points, equivalent to 14.87 per cent compared to the end of 2019. — Photo tinnhanhchungkhoan.vn

HÀ NỘI — Analysts from securities companies are optimistic about stock market movement during the first trading week of this year and betting the positive trend will continue.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange had gained 0.58 per cent to end the last trading session of 2020 at 1,103.87 points.

By the end of 2020, the VN-Index had increased by 142.88 points, equivalent to 14.87 per cent compared to the end of 2019. The minor HNX-Index had gained 98.1 per cent, UPCoM-Index 31.6 per cent.

Liquidity was also a highlight in December and 2020 as a whole. In the last month of the year, the total trading volume on the HoSE reached nearly 17.6 billion shares, an increase of nearly 70 per cent compared to November.

The average trading value in December also soared by 62.5 per cent month-on-month. All 23 trading sessions of December recorded a daily value of more than VNĐ10 trillion, an unprecedented value reported in the history of Việt Nam's stock market.

“The market is expected to rally in the first trading session of 2021. VN-Index will challenge the resistance zone of 1,110-1,130 points in the short term,” said Trần Xuân Bách, a stock analyst at Bảo Việt Securities Co.

“The index is likely to face heavy shaking and correcting pressure during its uptrend since overbought stocks have spread across the board. The domestic cash flow will support the market uptrend,” he said.

“Investors may start to pay attention to the fourth quarter and full-year 2020 earnings seasons of listed companies.

“The stock exposure should be maintained at 30 per cent-50 per cent of the total investment. Investors with high stock exposure should consider lowering stocks proportion of short-term positions when the market approaches the resistance zone we mentioned.”

According to Bảo Việt Securities Co, Việt Nam’s Stock Market closed an impressive year, growing by almost 15 per cent from end-2019.

BVSC said that the positive factors to support the 2021 stock market included cheap money, which is still a great cushion for the global market in general and Việt Nam's stock market in particular.

In 2021, the interest rate level in Việt Nam may stay as slow as it was at the end of 2020. As the year goes on, the interest rate may inch up as the credit and investment demand of businesses regains, the company said.

Việt Nam’s GDP growth will rebound strongly from the low base of 2020 thanks to the recovery of construction and service sectors along with the improvement of domestic consumption, investment capital, and export.

“We forecast 2021 GDP to grow by over 7 per cent,” it said.

“Foreign capital inflows are expected to emerging markets, including Việt Nam. Besides the cash flow trend into emerging markets, we think that the prospect of upgrading Việt Nam's stock market from a Frontier Market to a Secondary Emerging Market also supports the stock market to attract foreign capital inflows next year.

“Profit growth of listed firms is forecast to recover strongly from the low base of 2020, with profit growth of up to 25 per cent. However, given the current strong rallied market making as many stocks quickly reach and surpass their valuation prices, this may partly increase risks and reduce the attractiveness of the stock market in the short-term.

“We also need to note some potential risks such as US-China relations tensions, rapid inflation and central banks of major countries raising interest rates early than expected, reducing money injection. The probabilities of these risks are currently rated at a low level, but if they happen, all these risks can negatively impact the movements of the global financial market in general as well as Việt Nam's stock market.”

Regarding the market expectation in 2021, KB Securities Vietnam Co (KBSV) forecast VN-Index will expand its gain thanks to many positive supporting factors.

According to KBSC, the VN-Index recovered strongly and surpassed pre-pandemic levels, but there is plenty of room to expand more in 2021.

KBSV expected that the COVID-19 pandemic would still be effectively controlled in Việt Nam and the vaccine may be distributed evenly by mid-2021, curbing the pandemic.

KBSV expects that the VN-Index will surpass its historic peak of around 1,200 points in 2021 before experiencing some correction pressure.

However, KBSV said the first quarter of 2021 was considered the most potentially risky period for the market because the number of cases of infection worldwide was still rising and can slow down the economic recovery process.

However, this was considered a good opportunity for investors to increase and reopen their proportion if the market falls, it said. — VNS