The VN Index, which tracks Vietnam’s key Ho Chi Minh Stock Exchange (HoSE)-listed stocks, closed up last week at 428.67 points after it corrected by around 20 per cent from its recent peak of 512.46 points on June 9 to 418.55 points on July 14. Market analysts said as the market rebounded from its recent low, trading volumes fell sharply, indicating that few sellers were in the marketplace and this could usher in a bull market’s return.
“The country’s positive longer-term equity market has not been changed and the two market indices are still in a long-term uptrend,” Ken Tai Chee Ming, Singapore-based Kim Eng Securities’ senior technical strategist, told Kim Eng Vietnam Securities’ clients last week.
Quach Manh Hao, head of Thang Long Securities’ (TLS) Research and Investment Advisory Department, said technical models suggested buy opportunities with a long-term view, possibly for growth from August. In the short-term, he saw strong support from 422-425 points and expected the market to test its recent high of 450-454 points soon.
“Our investor confidence index has been at the level similar to the end of April. This means that the investor confidence index was now at its lowest level in three months and was ready to rise again,” Hao said, adding that global market performances may positively affect domestic investors.
“On trading plans, for big investors with a long-term view, this was likely to be a two- month opportunity. For small investors, they should be cautious,” Hao said.
Le Tuan Anh, head of VnDirect’s Analysis Department, added it might take time for a new bull to return, but good buying opportunities were available. “Markets continue to consolidate for expected growth soon,” Anh said.
Fiachra MacCana, Ho Chi Minh Securities Corporation’s (HSC) head of research, said after having seen a steady drop, combined with expected good corporate earnings reports, the markets were due to rebound. MacCana, however, was concerned at rising bond yields and deposit rates combined with diminishing credit growth expectations in the second half of this year. He said these factors were negative for equities and enough to offset good earnings news.
“With volumes rather low and little good news to talk about, this upward movement in the Vietnamese market indices maybe rather short lived,” MacCana said. “Both short and longer term investors should be cautious for now and let the market trade for a few days until we get a clearer idea of where possible support lies.”
By Trung Hung
