VN-Index goes sideways in 1,100-point territory

Vietnam’s benchmark VN-Index has been hovering around the 1,100-point area for more than a month amid declining liquidity.

The index, which represents the Ho Chi Minh Stock Exchange (HoSE), closed the November 27 to December 1 trading week at 1,102.16 points, up 6.55 points or 0.6% over the previous week.

Notably, the humble gain of 0.73% in the Friday session also made it one of the most active markets in Asia.

BID of BIDV bank, GAS of PV Gas and VNM of Vinamilk had the most positive impact on the index, with BID alone contributing nearly 0.7 points.

Meanwhile, VHM of real estate giant Vinhomes was the most negative influencer.

The week’s trading value on the HoSE was VND65.27 trillion ($2.69 billion), a sharp fall of 28.9% from the previous week. The per-session average on all the three exchanges – HoSE, Hanoi Stock Exchange (HNX) and the unlisted public companies market (UPCoM) – was VND15 trillion ($617.3 million), down 28.9% week-on-week and 20.8% compared to the five-week average.

Foreign investors continued to be net sellers to the tune of VND707.2 billion ($29.1 million) and VND11.69 billion on the HoSE and the HNX, respectively.

Some sectors that did well included agriculture with HAG of Hoang Anh Gia Lai Group (+13.46%), DBC of Dabaco Group (+4.58%), and LSS of Lam Son Sugar JSC (+3.56%); industrial real estate with ITA of Tan Tao Investment and Industry Corporation (+7.48%), VGC of Viglacera Corporation (+6.15%), and GVR of Vietnam Rubber Group (+3.07%); maritime transport with DVP of Dinh vu Port Investment & Development JSC (+10%), VOS of Vietnam Ocean Shipping (+8.7%) and HAH of Hai An Transport & Stevedoring JSC (+6.77%); and retail with PET of Petrovietnam General Services JSC (+ 5.94%).

Meanwhile, most real estate and banking stocks declined on strong selling pressure.

Analysts with Saigon-Hanoi Securities (SHS) believe that the VN-Index is still re-testing the 1,100-point zone and there is a high possibility for a new uptrend. In the medium term, after a period of deep decline, the market needs a long time to move to a new balance area and accumulate again, they say.

For short-term investors, disbursement opportunities will appear if the VN-Index remains above 1,100 points and liquidity improves gradually. Medium and long-term investors can wait for opportunities to buy more shares.

Another broker, Vietcombank Securities (VCBS) says the VN-Index will continue a period of accumulation with mixed gaining and losing sessions. Investors can put down money for short-term surfing goals during corrections, but this should be done with care.

Viet Dragon Securities (VDSC) recommends that investors take advantage of recovery sessions to restructure their portfolio and minimize risks.