Securities companies are betting Vietnamese shares may expand growth this week as the domestic market could benefit from positive macro-economic signals.

 

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange gained 1.06 per cent on Friday – the strongest rise in two weeks – to end last week at 958.28 points.

 

Friday’s strong increase helped the VN-Index recoup some of its losses made in the week. The benchmark index lost total 0.17 per cent last week.

 

An average of more than 150.4 million shares was traded in each session of last week, worth VNĐ3.4 trillion (US$146.5 million).

 

The HNX-Index on the Hà Nội Stock Exchange was up 1.14 per cent to end Friday at 104.21 points.

 

The northern market index fell total 0.13 per cent last week.

 

The Vietnamese stock market was volatile in four trading sessions last week as investors worried trade tensions between the US and other countries would slow global economic growth.

 

But hopes for the US Fed to cut lending rates twice in 2019 supported the market sentiment on Friday and send the VN-Index straight up to almost level with the previous week’s end of 959.88 points.

 

“Investors’ confidence was supported by the progress of the US stock market, thus, the VN-Index made strong gains,” BIDV Securities Corp (BSC) reported.

 

“However, trading liquidity was still low and needs testing next week,” even though it improved from Thursday’s figures, BSC added.

 

This week, the market sentiment could be more positive after the US late Friday announced it had postponed an increase of tariffs on $200 billion worth of Chinese goods.

 

The tariffs will remain at 10 per cent until June 15 instead of being raised to 25 per cent as previously planned.

 

Meanwhile, US Treasury Secretary Steven Mnuchin said on Saturday he had some straightforward and constructive discussions with the Chinese central bank governor Yi Gang on trade issues.

 

Those pieces of news could boost the market morale in early trading this week, securities firms expect.

 

In fact, investors are becoming more optimistic about the short-term prospects of the Vietnamese stock market.

 

According to vietstock.vn, VN30-Index futures made strong increases on Friday. The large-cap VN30-Index finished last week at 869.56 points.

 

VN30F1906 futures, which expire on June 20, gained 0.96 per cent to end the week at 874.80 points. VN30F1907 ended last week at 873.10 points, VN30F1909 and VN30F1912 concluded at 877.50 points and 878.90 points, respectively.

 

“Investors are still optimistic about the positive movement of the VN30-Index in the future,” vietstock.vn said.

 

Technically, the VN-Index has fallen for three straight weeks with depleting liquidity. But strong purchases appeared on Friday to boost the market.

 

According to Nguyễn Trung Du, VNDirect’s head of investment consultancy centre, low liquidity is a certain thing at the moment because short-term risks are quite likely given the unpredictability of the international financial market.

 

“Strong declining sessions occur frequently and indicate investors are kept highly worried about risks,” he told tinnhanhchungkhoan.vn.

 

“That could signal some technical recoveries for the VN-Index next week,” Sài Gòn-Hà Nội Securities (SHS) said in a note.

 

But the biggest challenge for the market now is a large part of the capital is still standing outside and moving to the derivatives market, SHS added.

 

“It could make the recoveries short-lived and the VN-Index may decline immediately when facing the resistance,” the stock brokerage said.

 

“The movements and decisions made in response to trade tensions and the macro-economy will continue driving the market sentiment,” SHS added.

 

The VN-Index could head to the nearest resistance of 970 points, SHS forecast. — VNS