Go easy on bottom-fishing, securities experts advise investors

Securities experts are advising investors to observe market movements with greater care in the coming sessions and limit bottom-fishing because signals of a short-term bottoming aren’t reliable enough.

The domestic stock market continued to experience a negative trading week November 7-11. Notably, strong selling pressures were still apparent in the second half of the afternoon sessions, significantly hindering the market's technical recovery after deep falls.

The benchmark VN-Index, which tracks the performance of the Ho Chi Minh Stock Exchange (HoSE), recorded two losing and three gaining sessions alternately this week. On Thursday, in particular, the index saw its deepest plunge of nearly 40 points with 170 stocks hitting their floor prices.

Bottom-fishing demand in the week-ending session could not help the VN-Index recover. Through the trading week, the benchmark lost a total of 42.62 points to close at 954.53.

NVL of real estate developer Novaland Group, HPG of steel giant Hoa Phat, EIB of Eximbank, TCB of Techcombank, and MBB of Military Bank had the most negative impacts on the VN-Index in the trading week. NVL alone robbed the index of more than 8 points.

On the other side were VCB of Vietcombank, BID of BIDV bank, GAS of PV Gas, MSN of Masan Group, and SAB of brewer Sabeco that exerted some positive impacts.

Most of the stock groups declined, with real estate and securities tickers experiencing the strongest falls.

Foreign investors turned strong net buyers for five sessions in a row, with a total net purchase value of VND3,803 billion ($153.3 million) on the HoSE, 353 billion ($14.23 million) on the Hanoi bourse HNX and VND78 billion ($3.14 million) on the unlisted public company market UPCoM.

The securities companies’ proprietary trading units also net bought VND152.4 billion ($6.14 million) on the HoSE.

According to Vietcombank Securities (VCBS), the technical recovery in the week-ending session partly eased investors' worries but liquidity remained at a low level.

"If the VN-Index goes past the bottom area created last week, it is likely to be heading to the 900-point territory. We recommend investors take advantage of the market’s technical recovery to lower the proportion of shares and increase the proportion of cash to reduce risks.

"The signals of a short-term bottoming are not reliable enough so investors should give priority to observing more market movements in the coming sessions and limit bottom-fishing," VCBS said.

Dang Duy Viet, a MB Securities (MBS) expert, said that the market was still in a downtrend as investors maintained a sell-off sentiment.

"The VN-Index will continue its downtrend until it comes to the support level of 880-900 points, which was the bottom of 2018-2019," he said.

In a recent announcement, the State Securities Commission said Vietnam’s stock market has fluctuated strongly because of cautious investor sentiment amidst global uncertainties and a less positive economic outlook. The decline mimicked the worldwide downtrend, it added.

The regulator said it would keep a close watch on the political-economic situation and policies of countries around the world, and make assessments of their impacts on the Vietnamese stock market in order to take suitable measures to ensure its stable and transparent development.