Brokers see no support this week Local equity benchmarks are expected to see challenges this week
11-12-2012
Despite some gains in early trade last Friday, bears jumped in with selling pressure intensifying towards the afternoon session. At the close, the VN-Index lost 1.89 points, or 0.49%, and ended the session at 383.8 while the HNX-Index dropped a slight 0.23% to 51.66.
Closing the week, the southern bourse index rose 1.6% due to three rising sessions while the northern exchange index gained 1.2%. The combined matching volume on the two exchanges averaged out at 50.5 million shares worth VND415.5 billion, up 75% and 54% from a week earlier respectively.
Last week saw few large block deals struck with foreign participation tumbling compared to the previous week. The foreign investors posted a combined net buying value of only VND40 billion.
Quarterly changes in the two FTSE Vietnam Indices were announced early Friday afternoon with SJS being excluded from the FTSE Vietnam Index while HVG has been excluded from the FTSE All-Share Index this time around. Meanwhile, the weights of VIC and CII were reduced.
There were no additions to either index. These moves were more limited and less positive than what many investors had hoped for and no doubt some holders of MBB may have been disappointed this time, HCMC Securities Co. said.
Viet Capital Securities Co. noticed that the market seems to have factored in the central bank’s bias towards interest rate cuts. As such, the media releases of some major banks taking proactive steps in any interest rate adjustments actually put an end to the three-day winning streak of the VN-Index. Investors continued to show interest in defensive stocks, pouring more capital into the consumer goods sector.
“We think the correction may slow down and markets will move sideways in next week’s opening session. In particular, VIC, the main contributor to the VN-Index’s plunge on Friday, now stands at a strong support, easing the downward pressure on the VN-Index next week. We think that short term traders may continue to take advantage of the correction to restructure their portfolios, but should refrain from chasing up prices when the markets recover. Strong resistances are still 390 points for the VN-Index and 52.5 points for the HNX-Index,” the broker added.
