Analysts said that in the current environment, financial markets will be very likely to continue revaluing.
Source: Free Pics
Investors went through a turbulent week as the VN-Index reported the biggest weekly fall since May. Analysts said that in the current environment, financial markets are very likely to continue revaluing.
On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index ended the last session of September at 1,132 points, up 0.54 percent. However, it lost 12 percent last month and more than 24 percent in 2022.
The HNX-Index on the Hà Nội Stock
Exchange (HNX) closed last week at 250.25 points, an increase of 0.34 percent.
For the week, both benchmarks posted big falls, of which the VN-Index dropped 5.9 percent
and the HNX-Index plummeted 5.4 percent.
Trading value on HOSE rose 12.8 percent over the previous week to nearly VND68.3 trillion (US$2.86 billion), equal to a trading volume of more than 2.8 billion shares, up 18.1 percent. Meanwhile, the trading value on HNX declined by 1.2 percent to VNĐ6.5 trillion, equivalent to a rise of 4.6 percent in the trading volume to 332 million shares.
Last week, the VN-Index broke below the psychological level of 1,200 points, causing pessimistic sentiment among investors. There was even a time the VN-Index plunged below 1,100 points to touch 1,099.44 points.
All industry groups inched down, with oil and gas stocks posting the biggest loss of 11.1 percent in market capitalization. The loss in oil stocks was attributed to strong corrections in oil prices in the international market as the risk of an economic recession raised concerns about weaker demand.
The stock market dipped as the economy recovered strongly. According to the General Statistics Office of Vietnam, the country’s gross domestic product (GDP) was estimated to increase 13.67 percent on year in the third quarter, due to the COVID-19 outbreaks in the same period of last year.
Foreign investors net sold nearly VNĐ1 trillion last week, mostly in realty ticker symbols.
Vietcombank Securities Company (VCBS) said that indicators are still not positive and there is no sign of bottom formation. There is still a possibility that the last session’s rebound was just a technical recovery and the bearish trend may remain.
"We recommend investors continue to wait for the market to show a signal of balance and do not rush for bottom-fishing to manage risks in the short term," VCBS said.
Last month, the market was under pressure from the rate hikes of the US Federal Reserve and the State Bank of Vietnam to outflow pressures of ETFs due to higher bond yields in many countries. This caused many stocks with good fundamentals to suffer under a strong selling force.
From a long-term perspective, the market is still undervalued compared to the average over the last five years. But in the short- and medium term, the market has yet to escape the downtrend. Therefore, investors with reasonable proportions and good short-term risk management can create a portfolio of stocks in industries with growth potential in the future to monitor and have disbursement plans when the market is stable again, SHS recommended.
KIS Vietnam Securities Company said that in the short-term, the VN-Index is likely to hit a new low due to bearish sentiment, meaning that the downtrend is confirmed. So the securities firm suggested investors should reduce the stock proportion in their portfolio and wait for the next signals.