Investors should keep a careful watch over the market as price movements have been sensitive and showed no certain trends, analysts said.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange recouped 0.71 per cent on Friday to close the week at 988.71 points. Its weekly loss totalled 1.54 per cent.
The minor HNX-Index on the Ha Noi Stock Exchange edged up 0.26 per cent to end Friday at 108.09 points, marking a decrease of 2.13 per cent over the week.
An average of 287 million shares were traded in each session last week, worth VNĐ6.4 trillion (US$274 million).
Liquidity recorded five consecutive declining sessions in the week, as cash flow contraction reflected investors’ caution, Nguyễn Hoàng Việt, head of the market research department at VietinBank Securities told tinnhanhchungkhoan.vn.
Investors should temporarily stay out of the market to monitor the indices’ movement, lower stock exposure to a safe level and reduce margin rates, Việt said.
According to Bảo Việt Securities Company, the market was fluctuating and trends were uncertain.
Stock exposure, therefore, should be limited at 30-40 per cent of the portfolio. Investors with a high proportion of stocks in the portfolio may consider reducing exposure in the recovery sessions.
On the other hand, investors with high cash proportion may consider buying back, prioritising their portfolio’s existing positions in the support zone.
Markets experienced a significant decline on March 21, with the VN-Index falling 2.05 per cent during the session.
“The Vietnamese stock market always reacts very quickly to external movements, especially to negative information,” Việt said. “This was reflected in the trading session on March 21.”
On March 21, The US Fed’s March policy meeting revealed its outcomes, significantly affecting global and local markets.
The Fed downgraded the US economy’s growth from 2.3 per cent to 2.1 per cent and annual inflation from 1.9 per cent to 1.8 per cent, reflecting a marked slowing in the growth of the global and US economies.
According to Việt, the move led to caution among investors and weaker cash flow.
However, the Fed held interest rates steady and decreased the benchmark rate from 2.9 per cent to 2.4 per cent by the end of 2019 (currently at a range of 2.25-2.5 per cent), signaling there will be no more hikes this year.
According to Ngô Thế Hiển, deputy head of analysis at Sài Gòn – Hà Nội Securities Company (
SHS
), this news supported emerging markets in general and the Vietnamese market in particular.
Phan Dũng Khánh, investment advisory director for Maybank Kim Eng Securities Company, said investors should restructure their portfolios by reducing the proportion of stocks in declining trend such as large-caps in the VN30 group and adding more stocks that were not affected by the general trend to make their list more stable.
They can shift their focus to mid-cap and penny stocks as there are many showing stable performances. Hiển also said investors should move away from market-sensitive sectors such as banking and real estate.
Bảo Việt Securities Company said in its report that the VN-Index’s upward momentum will encounter the considerable resistance in the 995-1,000 zone. If it fails to pass this zone, market’s short-term uptrend will end.
Foreign investors’ net buying activities, especially in domestic exchange-traded fund
E1VFVN30, will possibly continue next week. Companies will also start publishing their financial reports next week. These positive factors are expected to support the market. — VNS