VN-Index experiences week of gains, liquidity soars

Vietnam’s benchmark VN-Index experienced a very positive trading week (July 10-14) with five consecutive gaining sessions and a strong increase in liquidity.

The index, representing the Ho Chi Minh Stock Exchange (HoSE), opened the week with most stock groups in the green, breaking out of the old peak around 1,140. The uptrend continued in the following sessions thanks to strong demand for large-cap stocks. However, strong profit-taking pressure in the last session of the week narrowed the index’s gains.

The major index closed the week at 1,168.4 points, up 2.57% from the previous week. On the Hanoi Stock Exchange (HNX), the HNX-Index increased by 1.94% week-on-week to 230.19 points.

FPT of FPT Corp., HPG of steel giant Hoa Phat and VJC of low-cost carrier Vietjet Air were the most positive index influencers with FPT alone contributing nearly 1 point.

STB of Sacombank, BID of BIDV bank and PLX of Petrolimex had the most negative impacts.

Trading value on the HoSE reached nearly VND91.6 trillion ($3.87 billion) in July 10-14, up 18% from the previous week, corresponding to a 17.1% increase in trading volume.

Liquidity at HNX rose 13% week-on-week to over VND9.1 trillion ($384.9 million).

Real estate stocks were among the performers, with many stocks rallying with high liquidity like HDC of Ba Ria-Vung Tau House Development JSC (17.43%), NLG of Nam Long Group (15.49%), PDR of Phat Dat Real Estate Development Corp. (9.25) %), NDN of Danang Housing Investment Development JSC (8.51%), CII of Ho Chi Minh City Infrastructure Investment JSC (8.26%), and DIG of DIG Corp. (7.69%).

Financial service-securities stocks also made strong gains. VIX of VIX Securities went up 10.13%, SSI of Saigon Securities, 7.75%, SHS of Saigon-Hanoi Securities, 6.57%, FTS of FPT Securities 6.09%, and VCI of Viet Capital Securities 4.78%.

Meanwhile, tickers of companies in public investment projects, construction, building materials and steel saw a divergence.

Foreign investors were net sellers for the fourth consecutive week on the HoSE to the tune of more than VND1 trillion ($42.3 million). In the past four weeks (from June 19 to July 14), their net sales amounted to VND4.13 trillion ($174.7 million).

New uptrend

Broker Saigon-Hanoi Securities (SHS) forecasts that the VN-Index could form a new uptrend after surpassing 1,150 points. However, it says the index will be “strongly shaky” in the short term before making its next positive movements.

In the medium term, with accumulated internal strength and good upward momentum, the market is likely to set a new uptrend but this would depend on more positive macro changes, SHS says.

The broker recommends that short-term investors be cautious in the next trading week and monitor market movements at the support zone during corrections. It says that with the current momentum, a further uptrend is highly likely in the medium term.

“Investors can take advantage of the corrections to increase their proportion, and they should choose leading tickers with good fundamentals and stable growth potential that are moving in the current accumulation state.”

According to Vietcombank Securities (VCBS), if the VN-Index continues to diverge, accumulate and surpass the level of 1,170, it can move to the territory of 1,200-1,210 points. However, it advises caution, saying investors should maintain the proportion of stocks at below 50% of their portfolios, and give priority to holding securities, petroleum and retail stocks that perform well.