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New corrections weaken market uptrend
After the release of positive data related to the consumer price index and trade deficit, shares rebounded on both national stock exchanges last week.
"However, the economy does not seem to be brighter as the ease in the index was mainly due to spending reduction, decreasing industrial production and more inventory," commented FPT Securities Co analyst Le Thi Bich Hang.
On the HCM City Stock Exchange, the VN-Index closed the month of April at 473.77 points, up 1.85 per cent over the previous week.
Daily market value on the bourse averaged VND1.34 trillion (US$63.8 million), or 67 per cent of the previous week's figure.
Meanwhile, on the Ha Noi Stock Exchange, the average value of trades in a session totalled VND734.7 billion ($34.98 million), declining 26.5 per cent compared to the previous Friday's close.
The HNX-Index added 2.6 per cent to 79.86 points.
Speculative cash flow was fairly strong last week, said Hang, focusing on penny stocks. "This source of money is not stable, while the VN-Index is facing great profit-taking after a pretty strong rally."
Short-term investors could sell their shares if the southern bourse's benchmark index tested 480 points, while those who were not holding shares should consider buys when stocks came to appropriate low prices, she said.
Analysts of the financial information website vietstock.vn suggested buys in a number of shares, including blue chip food processor Masan Group (MSN) and some real estate performers such as Song Hong Construction Co (ICG), Khang Dien House (KDH) and Licogi (LCG). In addition, investors were told to sell Agribank Securities Co (ARG), construction material provider DIC (DIC), PetroVietnam Construction Co (PVX) and VNDirect Securities Co (VND).
Foreign investors shifted to net sellers by a margin of VND740 billion ($35.23 million) last month after being buyers by more than VND1.36 trillion ($64.76 million) in March.
Meanwhile, the Asian Development Bank's Asia Bond Monitor report stated that the Vietnamese bond market rose by the highest rate in the region of 16.5 per cent last year.
However, with the $17 billion scale, it was still a small market, with the government bond market larger than the corporate bond market – $15 billion compared to $2 billion.
The Viet Nam Bond Market Association last year assigned eight banks as market makers. This move could boost the , liquidity and transparency of the market, the report said.
Based on technical analysis, vietstock.vn forecast some strong corrections this week, but said that the uptrend would be retained.
"The market this month will be optimistic thanks to many supporting factors of reducing interest rates," predicted Bao Viet Securities Co analyst Pham Thanh Thai Linh.
Money could be poured slowly into the market, but banks were to offer loans for the securities sector, he added.
The allowance to deploy a shorter payment period to three days from June would also help boost the market.
The first quarter often saw enterprises suffering the worst business results, Linh said. "Entering the second quarter, the situation will be improved thanks to the refund of provisioning in many financial investment firms".
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