Illustrative image (Photo: VNA)Hanoi (VNA) - Vietnam’sstock market outlook will likely remain negative this week as a lack ofsupporting business information and potential global risks drive investorconfidence down, according to analysts.
The benchmark VN Index droppedslightly on April 21 to finish last week at 712.41 points. Vietnam’s key indexhas declined for two consecutive days and fell a total 0.8 percent from theprevious week.
The minor HNX Index on the HanoiStock Exchange closed up 0.5 percent on April 21, ending last week at 88.87points. The northern market index lost 0.9 percent week on week.
It also marked the secondconsecutive losing week for the VN Index and the fourth for the HNX Index,signaling a tough trading week ahead.
Market trading volume decreasedby 12.4 percent from the previous week to an average of more than 230.8 millionshares being traded in each session, but market trading value gained 7.3 percentto 4.92 trillion VND (218.78 million USD).
According to some analysts, thecorrection of the stock market last week with lower trading activities is asign that the market will continue to decline and that decline is necessarygiven current market conditions.
The VN Index has consistentlyincreased since December 2016, adding more than 70 points from the level of 650points, extraordinary improvement, with the market now needing a break beforeclimbing higher, said Nguyen Hong Khanh, head of analysis division at SacombankSecurities Company.
From this week onwards, investorswill continue to offload their portfolios as the stock market runs out ofsupporting information as firms will soon complete organising their annualshareholder meetings and report their first-quarter results, he said.
In addition, earnings reportspublished last week by companies, such as brokerages, did not result inpositive moves for their stocks as earnings had been priced in earlier byinvestor expectations and the share prices increased in the past few months,Khanh said.
Analysts also warned thatpotential global risk and the familiar “Sell in May” mind set will driveinvestor confidence down.
Vu Minh Duc, head of individualinvestor analysis division at Viet Capital Securities Company, said that markettrading liquidity had declined in recent sessions as investors were cautious.
Investors have been cautious withmarket trading on global risks, which are occurring in the Korean Peninsula andin the Middle East, he said.
This week, the stock market maysee strong changes in the shares of the Bank for Investment and Development of Vietnam(BIDV) and the Vietnam National Petroleum Group (Petrolimex).
BIDV will attract investors afterthe bank decided at its annual shareholder meeting on April 22 to pay a 7 percentdividend in cash on the request of the finance ministry.
Meanwhile, analysts foresee adownward trend for Petrolimex’s shares as the company may suffer fromprofit-taking.
Nguyen The Minh, an analyst at SaiGon Securities Inc, said that Petrolimex shares would have to withstand heavypressure from profit-taking after being listed on the HCM Stock Exchange on April21.
He said that the number ofPetrolimex shares had increased in 2016 and the company’s share prices alsorose strongly when they were traded in the over-the-counter market.
Minh warns that Petrolimex is nowamong the 10 largest companies by market capitalisation and its shares willhave strong impact on the market. Potential risks for the development ofPetrolimex will be included in the volatile global oil prices and the company’sbusiness policies.-VNA
VNA
