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Shares slide on rising caution in both bourses
Investors were more cautious following a continuous rising streak and increased profit-taking activities last week that resulted in shares sliding on both exchanges.
On the HCM City Stock Exchange, the VN-Index lost 0.21 per cent throughout the week, closing Friday at 593.04 points. Meanwhile, the HNX-Index on the Ha Noi exchange fell by a more substantial 3.64 per cent to end the week at 86.76 points.
Observers noted that cautious psychology was shown on decreased trading on both bourses.
Nearly 133 million shares, worth VND2.524 trillion (US$119.6 million), were traded each day on the HCM City bourse, down 34.5 per cent from the previous week.
On the Ha Noi Stock Exchange, the daily trading volume also declined 31.1 per cent during the period, averaging 89 million shares and valued at nearly VND1.03 trillion ($48.8 million).
Many investors opted to sell shares to realise cash profits after a long run of gains that caused heavy selling pressure on hot stocks in real estate, construction and mining, which had increased significantly during the previous uptrend.
Yet investors became more cautious following the news that this month the central bank will issue a document that will tighten activities of commercial banks, including the safety ratio in the funding business.
"Investors are concerned that this adjustment could adversely affect businesses and squeeze cash flows into the stock market," analysts from vietstock.vn wrote in a research note.
The market recovered on Thursday after information was released about the support package worth VND70 trillion ($3.32 billion) for the real estate sector, which will be disbursed by the central bank in the near future.
However, declining trading showcased that investors were still cautious and intended to wait for clearer signals before making investments.
"The market gained in the last two sessions, but liquidity fell substantially, that showed hot money has yet to come back the market," said Le Thi Bich Hang, analyst of FPT Securities Company in a report.
Hang predicted the Vn-Index would hardly surpass the threshold of 600 points this week, while the HNX-Index would remain below 92 points. The downtrend would likely prevail.
She suggested investors take profits in bull-trap sessions, while short-time investors should wait for the market to retreat to 565-570 points for the VN-Index, and around 80 for the HNX-Index to start buying.
"However, investors should choose their portfolios carefully, as performance of stocks will be different based on first-quarter business reports of companies," she said.
Also, foreign investors returned as net buyers last week after four consecutive net selling weeks. They purchased a combined value of VND1.717 trillion ($81.4 million) in shares in HCM City during the week, focusing on VinGroup (VIC) shares, which accounted for VND1.427 trillion through negotiations.
On the Ha Noi market, investors picked up shares worth a net value of VND28 billion ($1.3 million).
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