Market rally seen short-lived

11-Sep-2018 Intellasia | The Saigon Times | 6:00 AM Print This Post

Though the VN Index of the Hochiminh Stock Exchange managed to bounce back strongly last Friday, recent market trading conditions suggest that the index surge is short-lived and will likely continue the downtrend this week.

Bao Viet Securities Company said selling pressure was heavy last week and the main index turned weak before the strong resistance of 1,000 points. Besides this, a mixed performance among all stocks indicated that investor sentiment was unstable.

Although the VN Index was able to recover after a four-day losing streak, the main source of strength came from large-cap stocks such as banks, real estate and energy firms, which was not a good signal for the market. As the sentiment is quite volatile at the moment, the main index may drop further in the next one or two sessions.

Meanwhile, BIDV Securities Company predicted trading would be quiet as the market has yet to receive strong supporting news and global tensions will be rising in the near term.

Last Friday’s recovery might be short-lived as turnover continued to slide. Therefore, investors may choose to stand aside and be unwilling to take part in trading activities, resulting in low turnover this week.

The VN Index this week may test the supporting level of 960 points. It is forecast to either decline or move narrowly on high profit-taking pressure, the brokerage firm said.

FTSE, the index provider of DB x-tracker FTSE Vietnam exchange traded fund (ETF), announced a new basket for the FTSE Vietnam Index last Friday. Accordingly, property firm VHM and electrical equipment company GEX were added, and plastic enterprise BMP was removed.

The DB x-tracker FTSE Vietnam ETF will rebalance its portfolio to reflect these changes from September 10 to September 21. Viet Capital Securities Company in a recent report expected a moderate impact on the market when DB’s ETF rebalances its portfolio.

Back to last week’s trading, the VN Index broke a four-session losing streak, jumping 1.12 percent last Friday. Trading value on the HCM City market remained low at VND3.4 trillion.

For the week, the index fell 2.1 percent for its first week of losses in the last eight.

VNM was the top contributor to the day’s gain with its best day since June as the dairy firm recovered after dropping 30 percent over the past five months. Banks also led the market higher, with VCB, BID and CTG outperforming the index whereas TPB surged a day after falling to its floor trading.

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Category: Stocks, Vietnam

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