Vietnam stock market welcomes return of cash injection

The Vietnamese stock market has seen the return of large cash flows with trading value reaching over VND91.4 trillion ($3.89 billion) on the Ho Chi Minh Stock Exchange (HoSE) from June 5-9 week, up 16.9% from the previous week.

On Thursday alone, transaction value skyrocketed to VND23.7 trillion ($1 billion) - the highest level in the year.

The VN-Index, which represents the HoSE, recorded selling pressure and showed signs of forming a short-term peak this week when approaching the 1,115-point area.

The Vietnamese stock market had a rising session at the beginning of the week, with green covering all stock groups pushing the VN-Index up to 1,110 points.

However, short-term profit-taking pressure caused the index to drop on Thursday and close the trading week at 1,107 points on Friday. For the whole week, the VN-Index gained 16.69 points, or 1.53% from the previous week.

Foreign investors were net sellers on the major bourse with a value of VND484.17 billion ($20.62 million), and net buyers on the Hanoi Stock Exchange (HNX) with VND91.24 billion ($3.88 million).

Uptrend continues

Saigon-Hanoi Securities (SHS) said that the retracement wave formed on a tight accumulation has created a basis for the VN-Index to recover strongly to its short-term target of around 1,150 points. In the medium term, the benchmark index is expected to create an uptrend if the macro situation remains reasonable.

According to SHS, the market has formed an uptrend in the short term, opening up opportunities for surfing investors. Short-term investors can take advantage of the market's corrections to increase their portfolios. Meanwhile medium- and long-term investors should choose stocks in leading firms with good fundamentals and stable growth potential that are moving in the current accumulation state.

Yuanta Vietnam Securities argued that after encountering hurdles in the territory range of 1,115-1,125 points in early June, the VN-Index will probably head towards 1,135 points, with long-term risks easing. It recommended that long-term investors should continue to increase their portfolios, targeting electricity production and distribution, pharmaceutical, oil and gas technology and service companies.

Saigon Securities (SSI) believed that the government's support policies will have positive impacts on the stock market. However, listed firms will be under greater pressure to achieve profit growth because the economic recovery in the second and third quarters still faces many challenges and problems in the real estate and bond markets need more time to be resolved.

Technically, the VN-Index has escaped from a sideways trend in a narrow range of 1,040-1,080 and is entering a moderate uptrend towards the territory of 1,150 -1,160. Approaching its previous peak, the index is likely to see corrections and shakes at around 1,060 points, the broker predicted.

SSI assessed opportunities are increasing as the market gradually enters a bull cycle. Investors can catch this uptrend to seek profits, but they need to manage their risks by diversifying their portfolios and strictly complying with rules set for short-term transactions.