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Shares set for marginal growth this week

An investor watches share prices on an iPad. — VNS Photo Đoàn Tùng

HÀ NỘI – Shares are forecasted to extend a rally this week. However, experts expect a slower pace of growth, as profit-taking selling pressure increases as the benchmark VN-Index continuously touches new nine-year highs.

The VN-Index has recorded five consecutive gaining weeks on the HCM Stock Exchange, expanding  一. 三 一 per cent last week and closing Friday at  七 四 三. 四 一 points.

The southern market index has increased  三. 六 per cent this month and nearly  一 二 per cent since the beginning of this year.

On the Hà Nội Stock Exchange, the HNX-Index gained  一. 六 四 per cent for the week, ending Friday at  九 三. 六 九 points. The northern market index has climbed  一 七 per cent this year.

Money heavily flowed in the two markets, with a total of  三0 三. 六 million shares averaging over VNĐ 五. 八 trillion (US$ 二 五 五. 五 million) traded in the two markets in a single session. These figures represented increases of  七 四. 六 per cent in volume and  一00 per cent in value compared to the previous week’s levels.

Large-cap stocks, particularly banks, led the market rise following the information that the Government has submitted a new resolution on bad debts to the National Assembly. If approved, the resolution will ease bottlenecks and speed up the process of settling bad debts in credit institutions.

Price of BIDV shares (BID) leapt  一 三. 四 per cent last week, while Military Bank (MBB) and Eximbank (EIB) shares increased  九. 六 per cent and  五. 四 per cent, respectively.

Though admitting the new resolution is a positive factor for bank stocks, Nguyễn Ngọc Lan, head of the brokerage at Agribank Securities JSC, forecasts that bank stocks will likely stay in neutral position this week.

“It should be noted that bad debt restructuring is a time-consuming and difficult period, involving many economic subjects. Therefore, it takes a long time for the new policy to translate into business results for banks,” Lan told the website tinnhanhchungkhoan.vn.

She predicted that prices of bank shares would move around the current level with alternative up/down sessions.

Lan said cash inflows remain strong but the growth speed will likely slow down this week, as positive information has been reflected in the share prices.

“The VN-Index may maintain its upward trend in the first week of June before facing a correction period in the following week,” Lan said and noted money could flow in large-cap stocks, which have not increased much in the past period.

According to Nguyễn Việt Đức, a market strategist at MB Securities Co, foreign buyers will continue to support the market in the coming time.

Foreign investors were responsible for total net buy value of VNĐ 六0 七 billion on the two exchanges last week, a rise of  一 一0 per cent over the previous week’s figure.

Đức said foreign investors have constantly collected local shares, making bets on strong economic performance of Việt Nam. Both two ratings agencies, Moody’s Corporation and Fitch Group, upgraded their views on Việt Nam’s prospect to positive.

Meanwhile, in mid-June, Việt Nam’s stock market will likely be considered to enter the MSCI’s watchlist to be upgraded to an emerging market status.

“It is very important to have foreign investors’ confidence in the local market, because Việt Nam’s P/E (Price- Earnings) ratio is no longer cheap and is still able to grow thanks to strong GDP growth compared to other regional countries,” Đức said.

He suggested that investors pay attention to the shares which could be added to portfolios of exchange-traded funds in their June’s reviews, including petrol retailer Petrolimex (PLX), Sài Gòn Thương Tín Real Estate (SCR), Kinh Bắc City Development (KBC) and Hòa Bình Construction and Real Estate (HBC).

Several securities companies have predicted that the VN-Index will move around  七 四 七- 七 五0 points. – VNS