The benchmark VN-Index will soon face resistance at 680 to 690 points, as short-term profit-taking activities are forecast to intensify early this week.
The HCM City’s market recorded a positive week with four profitable sessions. The VN-Index gained over 1.8 per cent last week, to close Friday at 679.8 points, its highest level since November 23, 2016.
On the Hà Nội Stock Exchange, the HNX-Index rose 2.3 per cent to hit its highest level since November 1, 2016 at 82.1 points.
Liquidity inched up on the HCM City market. The trading volume rose nearly 4 per cent over the previous week, averaging 106 million shares, worth nearly VNĐ2.3 trillion (US$101.8 million) per session.
Similar figures on Hà Nội’s exchange were 27.4 million shares and VNĐ270 billion ($12 million) per session.
“The VN-Index is approaching the 680 resistance threshold where short-term trading could be considered,” Trần Hải Yến, analyst at Bảo Việt Securities Co, wrote in a market report.
However, the market outlook is forecast to remain positive with the return of bank stocks as the leading factor in last week’s uptrend.
Among the eight largest listed lenders on the two exchanges, only Military Bank (MBB) and Sacombank (STB) declined, while the other six increased between 4 and 14 per cent, of which Asia Commercial Bank (SCB) was the largest gainer, with a 14-per-cent price hike.
The three highest valued banks included Vietcombank (VCB), Vietinbank (CTG) and BIDV (BID), which gained between 8 and 11 per cent.
According to analysts at BIDV Securities Co (BSC), the sharp increase in bank shares last week, though unsurprising, was attributed to rumors about their positive earning prospects, while the current prices of these stocks remain fairly low.
Additionally, information about the rearrangement of a HCM City-listed bank, and other weak banks, has raised concerns over a new support policy by the central bank to speed up the restructuring of the banking system in the near future.
“If there is actually a support policy, movements of bank stocks last week could be the initial signal for a rising wave for these stocks, as happened in the first half of 2015,” BSC analysts wrote in a report.
The return of foreign investors as net buyers in the domestic market last week, accompanied by the cooling down of the US dollar in the forex market, is providing more momentum for the market’s upturn, they added.
Foreign traders were net buyers for the week on the two markets, responsible for a combined value of nearly VNĐ286 billion. Their buys focused on the HCM Stock Exchange with VNĐ245 billion, of which their disbursements concentrated on brewery giant Sabeco (SAB), with VNĐ118 billion, and dairy firm Vinamilk (VNM), with nearly VNĐ89 billion.