VN-Index falls for third consecutive week, investors advised to take caution

The Vietnamese stock market will likely continue to experience corrections in the coming sessions, so investors need to be cautious and make careful short-term trading plans to manage risks, said securities firms.

After two weeks of strong fluctuations, the market continued to record another week of deep decline with liquidity plummeting and all stock groups under selling pressure.

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), plunged in the first two trading sessions of the September 25-29 week to below the 1,140-point territory. In the September 27 session, increasing selling pressure dragged down the index to below 1,130 points at a time. However, bottom-fishing demand helped it return to the 1,155-point area.

Ending the week, the VN-Index lost 38.9 points or 3.26% from the previous week to 1,154.15, marking its third consecutive losing week. Trading value on the HoSE reached nearly VND93 trillion ($3.83 billion), down 21.6% from the previous week, equivalent to a decrease of 17% in trading volume.

However, closing the third quarter of 2023, the VN-Index increased by 3.03% from the second quarter, marking its three consecutive quarters of gaining.

CTG of VietinBank, VCB of Vietcombank and HPG of steel maker Hoa Phat had the most negative impact on the VN-Index. In particular, CTG took away nearly 1 point from this index. Meanwhile, VIC of Vingroup, VHM of Vinhomes and VPB of VPBank were the most positive influencers. VIC alone contributed nearly 2 points to the index.

The real estate stocks were the worst performers as TCH of Hoang Huy Investment Financial Services JSC lost 14.0%, NHA of Hanoi South Housing and Urban Development Corporation 13.79%, DRH of DRH Holdings JSC 12.87%, TDC of Binh Duong Trade And Development JSC 11.69%, NBB of NBB Investment Corporation 11.29%, and CEO of CEO Group 10.88%.

The securities and banking groups also fell sharply, with VIX of VIX Securities (-11.27%), VDS of Viet Dragon Securities (-7.65%), VND of VNDirect Securities (-6.85%), EIB of Eximbank (-8.42%), STB of Sacombank (-6.84%), and SHB of Saigon-Hanoi Bank (-5.93%).

On the contrary, seaport and logistics stocks showed positive performance. GMD of Gemadept Corporation gained 3.59%, DVP of Dinh Vu Port Investment and Development JSC 2.38%, TCL of Tan Cang Logistics & Stevedoring JSC 2.35%, and HAH of Hai An Transport & Stevedoring JSC 1.57%.

A silver lining, foreign investors returned to net buyers to the tune of over VND632 billion ($26 million) on the HoSE after net selling for four consecutive weeks.

Broker Saigon-Hanoi Securities (SHS) said that the corrections in the past week were necessary but deeper than forecasts, weakening the short-term upward momentum, so the market will need more time to form a new accumulation base.

"In the short term, the correction and accumulation may continue. Short-term investors should maintain a low proportion of stocks and take caution as the market will only see a technical recovery," it noted.

Meanwhile, medium and long-term investors can continue to hold their portfolios as the market will still maintain an uptrend in the long run, it advised.

Another broker Vietcombank Securities (VCBS) held that in a positive scenario, the VN-Index can move up to the territory of 1,170-1,175 points in the short term. It recommended investors be cautious and make careful plans for short-term trading to manage risks. They should maintain a stock proportion of 10-30% for short-term surfing trading strategies.