Shares to continue downward trend amid Ukraine conflict

The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) declined 0.85 per cent to close Friday at 1,466.54 points.

The index had declined 2.58 per cent last week.

An average of 896 million shares were traded on the southern exchange during each session last week, worth VND29 trillion (US$1.3 billion).

According to Vietcombank Securities Limited Company (VCBS), the sharp drop in Viet Nam’s stock market last week was also in line with the general trend of stock markets in the world, as it was mainly affected by the Russia-Ukraine conflict.

The liquidity of each session last week and the whole week’s liquidity decreased, showing that the cash flow is still choosing to stay out of sight. In general, the market still witnesses divergence, with stocks benefiting from the escalation of commodity prices on the international market, going against the movement of the general index and large-cap group.

VCBS recommends that investors can take advantage of the downward correction to disburse with a small proportion, in order to gradually accumulate target stocks that are being traded at discounted price ranges for the medium and long-term portfolio.

“At the same time, it is also necessary to focus on strict risk management and avoid abusing leverage in times of strong market volatility,” it said.

According to SSI Securities Joint Stock Company (SSI), at the end of last week, the VN-Index broke through the support level of 1,470 points. With the above developments, the VN-Index is likely to continue correcting to the first support zone at 1,445 - 1,450 points and the next strong support zone at 1,425 - 1,400 points.

“The immediate support area of ​​the market will be in the range of 1,425-1,450 points, said Saigon-Hanoi Securities Joint Stock Company (SHS).

However, SHS is still optimistic about the market's prospects in the long term as Viet Nam's macroeconomy is still stable compared to other countries in the world.

“Inflation may increase to a high level in the first quarter this year due to the increase in gasoline prices, but if calculated for the whole year, it is still possible to achieve the target set by the National Assembly earlier,” SHS said.

“This week, the VN-Index may correct to the next support area of ​​1,425-1,450 points if it does not regain the threshold of 1,470 points soon,” SHS said.

"Investors can still hold the previously purchased portfolio and consider increasing the proportion of stocks if the market has a correction to the support zone of 1,425-1,450 points," recommended SHS.

“We maintain a cautious view on the market until the Fed officially raises interest rates, along with the ETFs’ completion of their portfolio restructuring for the first quarter,” said Tran Xuan Bach, a stock analyst at Bao Viet Securities Co (BVSC).

“This T+ recovery is still only prioritised for investors with a high-risk tolerance and high cash exposure in the portfolio. The trading strategy at this stage should focus on available stocks or stocks in sectors with supporting stories. Investors should choose stocks that are cumulatively correcting. Limit the application of the breakout trading strategy at this stage,” Bach said.

Foreign investors net sold VND5 trillion last week. On HOSE alone, foreign investors had the third consecutive week of net selling, with a value of 6.8 times higher than the previous week, at VND5.34 trillion. This was the strongest net selling week of foreign investors on HOSE since mid-August 2021.

Regarding the movements of stocks, the group of consumer goods dropped the most last week. Pillar stocks such as Masan Group (MSN), down 11.7 per cent, Sabeco (SAB) was down 3.8 per cent and Ha Noi Beer Alcohol and Beverage Joint Stock Corporation (BHN) was down 2.7 per cent.

The oil and gas group lost ground due to the influence of the world oil prices. Specifically, Binh Son Refinery (BSR) decreased by 0.7 per cent and Viet Nam National Petroleum Group (PLX) decreased by 5.1 per cent.

Bank stocks also created strong correcting pressure on the whole market. Vietcombank (VCB) fell 1.3 per cent, Saigon-Hanoi Bank (SHB) declined 1.4 per cent, Vietinbank (CTG) dropped 1.5 per cent, Techcombank (TCB) decreased 2.1 per cent, Bank for Investment and Development of Vietnam (BID) was down 3.3 per cent, VPBank (VPB) moved down 4.5 per cent and Asia Commercial Bank (ACB) was down 4.7 per cent.