Stock investors advised to take caution in short term

Securities investors have been recommended to wait for clearer signals of market balance, with at least 3-5 positive accumulation sessions.

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), just experienced a volatile trading week with large fluctuations and shakes. The index suddenly made a strong gain at the beginning of the week to approach the 1,090-point territory, with significant improvement in liquidity.

However, selling pressure lingered in the following sessions, especially from the real estate group and many large-cap stocks in the VN30 basket, causing the VN-Index to reverse to its old bottom, at around 1,030.

Closing the trading week of February 20-25, the VN-Index lost 19.75 points, or 1.9%, to 1,039.56, while the HNX-Index on the Hanoi Stock Exchange (HNX) dropped 2.66 points, or 1.3%, to 207.32.

Trading value on the HoSE rose 27.2% from the previous trading week to VND54,889 billion ($1.92 billion), equivalent to an increase of 29.2%. The respective figures on the HNX were 39.9% and VND6,784 billion ($285.1 million).

VHM of Vinhomes, MSN of Masan Group, CTG of VietinBank, and BID of BIDV bank had the most negative impact on the VN-Index in the week. Notably, VHM alone stole nearly 2.5 points from this index. On the other side, VCB of Vietcombank, HVN of national flag carrier Vietnam Airlines, and SAB of brewer Sabeco showed the most positive influence.

The market correction made all major groups decline. Real estate stocks suffered the biggest fall of 3% with VHM losing 5.3%, NVL of Novaland 2.1%, PDR of Phat Dat Real Estate Development Corp 3.7%, DXG of Dat Xanh Group 7.2%, NLG of Nam Long Group 8.9%, and KDH of Khang Dien Holdings 6.5%. They were followed by oil and gas codes with a decrease of 2.6%.

Foreign investors continued to be net sellers on both bourses in the past trading week to the tune of about VND1,298 billion ($54.45 million). DXG was net sold most with 13.6 million shares, followed by VND of VNDirect Securities and VHM with 5.9 million and 5.7 million shares, respectively. Meanwhile, NKG of Nam Kim Steel JSC was net bought most with 3.7 million shares.

Saigon-Hanoi Securities analysts believed that the market's downtrend has not shown any signs of ending, with consecutive declines in the past week. The market cannot create an uptrend in the near future. The main index is moving in a retracement wave and needs a rather long period around the equilibrium point.

They warned that the macro situation in the coming time is still unpredictable, especially from the credit and bond markets, as well as the risk of global economic recession and the further escalation of the Russia-Ukraine conflict.

In general, the current stock price levels are quite attractive for medium- and long-term investment, they said, adding that many key stocks are moving positively, maintaining their uptrend, and may even surpass their all-time peaks. “Therefore, disbursement opportunities will still appear in the current period,” the analysts noted.

“Investors should focus on strong stocks that tend to accumulate, recover soon and continue to maintain their uptrend as well as those of leading firms that maintain profit growth and have bright growth outlook this year. They can take advantage of the current correction of the market to increase disbursement,” it was added.

Meanwhile, Vietcombank Securities said as the VN-Index failed in its recovery efforts, investors should actively raise the proportion of cash and limit bottom-fishing even though the index bounces up.