Brokerages say poor turnover a bad sign

23-Oct-2018 Intellasia | The Saigon Times | 6:00 AM Print This Post

Securities firms have predicted negative movements on the local stock market this week, saying that the two exchanges went through poor turnover amid cautious trading last week.

Last Friday, the VN Index of the Hochiminh Stock Exchange slid as much as 1.8 percent in the first hour of trading but recovered in the rest of the session to close down just 0.53 percent. For the week, the index dropped 1.3 percent for a third straight week of losses.

Leading gas group GAS was the top contributor to the pullback, hitting a one-month low after a 10 percent slump over the last two weeks. The price of Brent crude oil fell overnight to $79 per barrel.

VJC, a low-cost air carrier, extended a 13 percent plunge over the last three weeks to a three-month low.

Notably, both exchanges saw trade slumping, with matching volume averaging out at over 127.4 million shares and 35.5 million shares per session on the HCM City and Hanoi bourses, down 41.2 percent and 38.7 percent from a week earlier, respectively.

Bao Viet Securities Company in a report said selling pressure is predicted to extend to this week’s trading, which may have negative impacts on the stock market, in the context of declining trade by domestic and foreign investors.

Last week, cash flow showed signs of weakness and was withdrawn from the market. Many listed companies announced their third-quarter earnings results and numerous schemes to boost earnings in the last months of the year, but they failed to give strong support to the market.

In addition, global stock markets witnessed negative movements in the past week due to concerns over the US-China trade war. Therefore, investors may continue their ‘wait-and-see’ mode, resulting in sluggish trade and further index drops this week.

Maritime Bank Securities Company noticed that large caps were under the heaviest profit-taking pressures last week, especially oil and gas stocks. Leading banks and finance companies, which had been index savers, also weakened and failed to lift the market.

Therefore, the stock indexes may correct further or enter a sideways moving period. They may resume their uptrend if receiving supporting news such as positive business results of large firms and strong performances of the macroeconomy.

According to Viet Capital Securities Company, the European Commission adopted the EU-Vietnam trade and investment agreement, taking a step closer to a final signature ahead of coming into effect in early 2019. The deal covers many areas, such as government procurement, State-owned enterprises, competition, intellectual property, sustainable development and transparency.

The brokerage expected the trade pact will help tighten the trade relationship between Vietnam and the EU and encourage more foreign direct investment inflows into Vietnam, especially amid rising trade tension between China and the US


Category: Stocks, Vietnam

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