The Vietnamese stock market's three-session gaining this week is only a temporary reversal, and investors who went bottom-fishing can gain windfall profits in the time ahead, analysts say.
The market experienced a choppy week and made an impressive recovery in the last trading session. The benchmark VN-Index, which tracks the performance of stocks listed on the Ho Chi Minh Stock Exchange (HoSE), was slightly up in the first session of the week. However, the rise did not last long as it lost more than 36 points in the following session.
Notably, on Tuesday, the VN-Index plunged to under 1,000 points at a time, but higher demand helped maintain the level. In the three latest sessions, the index climbed continuously over strong demand.
The benchmark finished the week at 1,061.85 points, up 2.5% from the previous week, ending five consecutive weeks of decline.
Stocks like BID of BIDV bank, GAS of PetroVietnam Gas JSC, CTG of Viettinbank, HPG of Hoa Phat Group, MWG of Mobile World JSC and VNM of Vinamilk were the best drivers of the VN-Index in the week.
Meanwhile, VHM of Vinhomes JSC, NVL of Novaland and TCB of Techcombank most adversely impacted the index.
Bank stocks were the strongest support for the index. BID and CTG rose over 13% while others like MBB of Military Bank (MB), SHB of Saigon-Hanoi Bank, and VCB of Vietcombank also forayed into the green.
Foreign investors were net buyers of more than VND2,850 billion ($118.1 million). HPG was the bestseller with 12 million shares, followed by SSI of SSI Securities Corporation and SHB with 9.3 million and 8 million, respectively.
On the other side, E1VFVN30 of DCVFMVN30 ETF Fund was net sold most, with 2.1 million fund certificates.
Despite the rallies and experts’ view that stock valuations have become attractive, the cash flow remained cautious, reflected by the low liquidity levels.
Trading value on the HoSE was just VND8,900 billion ($368.8 million) Thursday, the lowest in two years despite the best recovery in one month.
The cash flow reflected investors’ cautiousness amid the lack of support information. Stock market bottoming has topped attention in most sector forums on social networks.
Le Duc Khanh, director of investment capacity development at VPS Securities Company, said that like Asian and American stock markets, Vietnam’s market recovered in three sessions in a row, with both VN-Index and VN30-Index (VN30), which comprises the largest 30 capped stocks, predominantly green.
Hoang Cong Tuan, chief economist at MB Securities Company (MBS), said the Vietnamese market has absorbed all negative information, including the U.S. Federal Reserve's (Fed) interest rate hikes and the Vietnamese government's handling of bond issuance violations.
Market declines have driven the price of many stocks to their lowest level, making them attractive to investors, he noted.
For short-term trading, investors should follow the rule of cutting losses, Tuan said. For long-term investments, they should buy stocks of companies with good business results and prospects at a suitable time.
Analysts from Vietcombank Securities (VCBS) forecast that the VN-Index is unlikely to return to the record high in April, or to slide to below 950 points. It would hover around 1,000-1,200 points in the last three months of this year, they said.
The analysts maintained their prediction for the market liquidity throughout the year at about VND22 trillion ($911.5 million) each session on average on all the three bourses - HoSE, Hanoi Stock Exchange (HNX) and Unlisted Public Company Market (UPCoM).