As cautious investors have kept a wait-and-see attitude, securities enterprises have predicted no improvement in the stock market this week and thus a narrow range of stock price movements with low liquidity.
After a mild recovery early last week, the market saw steady declines towards the end of the week amid falling liquidity. On the last trading day, it continued to tumble although the National Assembly passed key parts of the Government’s stimulus program regarding tax cuts for small and medium-size enterprises while liquidity sharply improved on supportive foreign investors.
Ending last week, the VN-Index lost 5.92 points, or 1.37%, against the previous week to close at 427.17 while the HNX-Index finished at 73.3, down 1.53 points, or 2.04%.
Viet Capital Securities Co. said investors were still pessimistic with the market’s ability to move upwards as the banking system continued to struggle to resolve bad debts and credit growth. Further declines in domestic gold prices also failed to lure investors back into equities.
Some banks are even reporting a rise in customer deposits even with lower deposit rate caps in place, indicating investors are quite risk-adverse in the current state of the market. Worse still, the approval of the tax resolution also failed to cheer investors as they worried that the fiscal package is not enough to contribute a significant effect to GDP (gross domestic product) growth, the broker said.
Viet Dragon Securities Co. said sentiment of stock holders had turned pessimistic last Friday as the market could not hold the upward trend in the afternoon session. However, the current selling pressure is not too strong and enough to draw attention of buyers. Therefore, the VN-Index will probably move in a narrow range this week.
“We expect the return of foreign investors would help a number of stocks pick up in the coming time but a recovery of the remaining stocks would have to depend heavily on local investor confidence,” the broker added.
Meanwhile, HCMC Securities Co. (HSC) said after a sideways consolidation, a downside gap with high volume such as last Friday was not a good sign because it showed strong selling pressure.
“The VN-index should hold above 425 points or the short-term trend rating would be downgraded to ‘down’. We decided to close out our existing long positions today. We will stay on the sidelines waiting for fresh buy signs. The mid-term trend remains ‘neutral’ as the odds of a successful break down below the level of 410 points are very minimal over the next coming months,” HSC predicted.
The Saigon Times Daily