As the local market pulled back on profit taking ahead of the weekend, securities firms predicted sellers would continue to step into the playground with sentiment turning cautious this week.
After a decent run last week, the market eased last Friday as investors sold off some key index drivers like DPM and HAG at the close. However, the VN-Index gained 1.8% against the previous week thanks to three rising sessions while the HNX-Index rose 1.3%. The highlight of the week was a huge improvement of turnover on the southern bourse, which surged 62% week-on-week, on the back of 37.5 million CTG shares traded in put-through deals.
Foreigners turned net sellers after staying on the buying side during the week although they were still net buyers in Hanoi. However, their participation was limited.
Viet Capital Securities Co. (VCSC) noted the consumer price index in HCMC, Hanoi and major provinces came out last Friday morning, showing negative growth for July. But investors were not as transfixed on the CPI as they were several months ago and viewed the rapid slowdown in CPI as an indicator of poor aggregate demand, which was stunting economic recovery. That might be one reason why the market was unable to hold unto opening bell gains.
“Although the market did not end the week on a positive note as we had hoped, our technical model is still in a bullish mode and we regard Friday’s move as a normal correction, especially when taking into consideration that the VN-Index and the HNX-Index gained 7% and 9% from their lows on July 11,” the broker said.
“We would stay long over the next five to 10 days and keep our short-term targets of 450 and 75 points. However, there is a supply overhang on both exchanges, with around million unmatched bids on the southern bourse and 20 million on the northern exchange. Chances are there could be further correction in the first part of next week,” VCSC added.
HCMC Securities Corp. said some technical trading and perhaps speculation that petrol prices might be increased slightly fairly soon caused stock prices to dip just ahead of the close last Friday.
“In any event, it has been a very good week for the market and sentiment remains very positive. If anything this pullback will give investors the opportunity to buy on weakness on Monday with very strong support seen just below current levels,” it said.
The Saigon Times Daily