Brokers predict seesaw trading in Vietnam this week

Securities brokers have predicted stock prices may seesaw in a narrow range again this week as the VN-Index is still near the sensitive resistance line of 385 points while investors remain cautious.

The indexes of both southern and northern bourses made a mild recovery last week but liquidity stayed poor with a daily matching volume averaging out at less than VND500 billion on the two exchanges. The VN-Index and HNX-Index closed the week at 386.71 and 51.58 points, up 3% and 1% against the previous week, respectively.

Transactions involving foreign investors slightly declined, with net buying put at VND37.8 billion on the southern bourse and VND18 billion on the northern exchange. However, they actively sold BVH and a number of bank stocks such as STB, MBB and EIB.

Viet Dragon Securities Company (VDSC) said Q&A sessions between National Assembly deputies and Prime Minister Nguyen Tan Dung and his cabinet members starting on Monday would be the spotlight of this week. The fact that the central bank governor and minister of industry and trade have been picked for National Assembly grilling over pressing issues is widely expected.

“However, we don’t expect this news to prop up the stock market. In short term, the market will continue seesawing in a narrow range,” VDSC said.

HCMC Securities Corp. (HSC) noted that last Friday the markets saw a late but fairly broad based rally following two days of strong buying by some foreign investors. For the third day running, the VN-Index had seen the bulk of the upside led by fairly active foreign buying.

“This seems to have convinced some retail investors to go bargain hunting on Monday but given the late hour of the rally we suspect professional traders also played a hand in it. Volumes are still very low, however and while the market could move higher for another day or two unless turnover picks up the movement will not be sustainable. We see no real fundamental reason for the change of heart and hence this looks like a classic short term rally to us after the recent downside,” HSC said.

Viet Capital Securities Co. predicted the VN-Index might correct slightly while the HNX-Index might still move sideways in the resistance zone. In particular, blue-chips on the southern bourse, which had advanced in recent sessions, were trading near short-term resistances last Friday.

“Therefore, we maintain a ‘neutral’ rating for the short-term. Investors should not buy more stocks in the early sessions of next week and wait for the VN-Index and HNX-Index to break above the respective resistances of 380-387 points and 51-52.5 points,” the broker said.

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