VN-Index loses 42 points this week, could lose more

Vietnam’s benchmark VN-Index lost more than 42 points to 1,019.82 this week, and the decline is expected to widen next week.

The market’s trading value continued to slide as well. VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), started the week with a decrease of nearly 11 points and regained over 12 points in the next session before suddenly plummeting on panic sell-offs in the week-ending session.

Strong selling pressure Friday stole over 43 points at a time, driving the index to the 1,013-point territory as sellers far outnumbered buyers.

Closing the October 17-21 trading week, VN-Index lost 42.03 points or 3.96% to 1,019.82 while HNX-Index on the Hanoi bourse dropped 8.47 points or 4.6% to 217.41.

The trading value on the HoSE fell by 18.8% from the previous week to VND50,972 billion ($2.05 billion), corresponding to a decrease of 18.3% in trading volume to 2,376 million shares.

Meanwhile, the Hanoi Stock Exchange (HNX) saw trading value up 4.7% to VND4,971 billion ($200 million) but trading volume down 6.7% to 280 million shares.

VHM of real estate developer Vinhomes, HPG of steel maker Hoa Phat, VIC of Vingroup, TCB of Techcombank and MWG of Mobile World Investment Corporation had the most negative impacts on the VN-Index.

On the other side were VNM of Vinamilk, SAB of brewer Sabeco, DHG of DHG Pharmaceutical JSC and REE of Refrigeration Electrical Engineering Corporation.

Foreign investors were net sellers on the HoSE and net buyers on the HNX, with a total net purchasing value of VND24 billion ($970,000). VNM recorded the biggest net purchase with 4.3 million shares, followed by NKG of Nam Kim Steel JSC and DCM of Petrovietnam Camau Fertilizer JSC with 2.9 million shares and 2.7 million share, respectively. On the other side, HPG saw the biggest net selling with 34.8 million shares.

Meanwhile, businesses that traded proprietary shares net-sold more than VND130 billion ($5.23 million) on the HoSE, mostly selling PNJ of Phu Nhuan Jewelry JSC and ETF fund E1VFVN30.

According to Hoang Cong Tuan, chief economist at MB Securities JSC (MBS), this is a good time to invest in the stock market but investors should avoid margin trading.

"Investors should not be too panicky and closely observe the 1,000-point territory to put down money," Tuan said.

Meanwhile, Do Hoang Quan, E-Broker director at VPS Securities, advised investors not to buy stocks at this time as the market might continue to plunge, with three pillar sectors - banking, securities and steel - likely to drop to their old bottom or further.

In their report, analysts of Saigon-Hanoi Securities JSC (SHS) said that the bond market’s negative developments have resulted in strong sell-offs of financial, banking and real estate stocks.

As the market does not show signs of short or medium term improvement, investors need to maintain a reasonable proportion of shares in their investment portfolio. They should choose stocks of companies with good business performance with attractive prices, the analysts advised.

The Vietcombank Securities Company (VCBS) recommended that investors actively raise the proportion of cash, patiently wait for the market to find equilibrium and limit early bottom-fishing as VN-Index may go down past the 1,000-point mark in the short term and maintain the downtrend in the medium term.