Analysts are optimistic about market recovery this week

February 01, 2021 - 06:33

Việt Nam's stock market recorded its worst performance last week with the biggest single-day loss on January 28 as selling pressure and a surge of new COVID-19 cases weighed on the market sentiment.

Workers at one of Hoa Sen's plants. — Photo courtesy of Hoa Sen Group.

HÀ NỘI — Việt Nam's stock market recorded its worst performance last week with the biggest single-day loss on January 28 as selling pressure and a surge of new COVID-19 cases weighed on the market sentiment.

However, the rally in the next session helped ease investors' concerns. Analysts from securities firms also said that the market could continue to recover this week.

The market faced a strong headwind and fell for five consecutive sessions last week. Especially, the market benchmark VN-Index lost 73.23 points on Thursday, the biggest single-day loss since the market was established, as new community infections of COVID-19 were reported in Hải Dương and Quảng Ninh provinces. 

Two community infections of COVID-19 were confirmed on Thursday morning, marking the first local transmissions for almost two months. One of the new cases is linked to a woman who tested positive for the new variant of coronavirus after arriving in Japan to work earlier last week.

Measures were carried out immediately to contain the spread. 

But shares bounced back, recovering some of their losses on the last trading day of the week but still posted a weekly decline.

For the whole week, the VN-Index lost 110.17 points to 1,056.61 points. The HNX-Index declined by 25.91 points to 214.21 points.

The market liquidity on both exchanges slightly reduced against the week before with a trading value of about VNĐ19.3 trillion per session. 

On the Hồ Chí Minh Stock Exchange (HoSE), the trading value decreased by 2.3 per cent to nearly VNĐ85.1 trillion, equivalent to a trading volume of over 3.8 billion shares, down 5.2 per cent. On the Hà Nội Stock Exchange, the trading volume also fell 8.2 per cent to 825 million shares, worth nearly VNĐ11.5 trillion, down 9.9 per cent. 

According to Saigon - Hanoi Securities JSC (SHS), the gain in the last trading session meant that the fourth wave's bottom was determined at around 1,000 points, and the market might recover and accumulate before entering the fifth rising wave of this cycle. The firm expectation is based on the Elliott wave theory. 

Similarly, Bảo Việt Securities Co. said that after two weeks of declining, the market will recover this week. The VN-Index might head to resistance territory of 1,085 - 1,100 points. However, the securities firm warns of strong fluctuations in some sessions before continuing to recover in the short-term. 

In a report, Mirae Asset Securities (Việt Nam) Limited Liability Company assessed last Friday's session was more of a technical recovery.

"The VN-Index recorded the biggest fall in many years. Within two weeks, the index lost more than 200 points, equivalent to 16.7 per cent, and returned to the 1,000 points level. The quick decrease may be the reason which helps indices bounce back at the end of last week," said Mirae Asset.

All sectors from banking, securities, production, retails to construction, real estate and IT posted strong decreases with many big stocks hitting the maximum intra-day loss of 7 per cent. 

Material group posted the biggest loss of 14.8 per cent of market capitalisation with Hòa Phát Group Joint Stock Company (HPG) down 10.3 per cent, Hoa Sen Group (HSG) down 11.9 per cent and Petrovietnam Fertilizer & Chemicals Corporation (DPM) down 11.9 per cent.

The market capitalisation of oil and gas group declined by 11.9 per cent with many stocks plunging such as Việt Nam National Petroleum Group (PLX) down 9.8 per cent, PetroVietnam Drilling & Well Services Corporation (PVD) down 16.9 per cent and PetroVietnam Technical Services Corporation (PVS) down 16.6 per cent. 

Meanwhile, foreign investors were net buyers last week. Overall, they poured over VNĐ1.3 trillion into the stock market, equivalent to 46.4 million shares. VNS