By Viet Nam News
Asia News Network
The benchmark VN-Index on the HCM Stock Exchange lost a cumulative 1.3 per cent last week, closing at 718.45 points on Friday, the first weekly loss in a month.
The southern market index had reached a fresh nine-year peak at 731.3 points last Tuesday before reversing in the face of a sudden bomb attack by the United States on Afghanistan on Friday.
On the Hanoi Stock Exchange, the HNX-Index decreased 0.6 per cent for the week, ending Friday at 89.64 points.
On Sunday morning, North Korea fired an unidentified ballistic missile which exploded almost immediately after the launch. There has been no response from the United States.
US President Donald Trump has opposed nuclear testing by North Korea, and dispatched a warship fleet towards the Korean Peninsula this month.
“Although the nation’s military is ready, observers see low chance of fighting on the Korean Peninsula,” said Tran Hoang Yen, a stock analyst at Bao Viet Securities Company, on Sunday’s note.
However, Yen also advised caution amidst increasing instability as “negative news” as well as profit-taking pressure after a continuous rally triggered the VN-Index’s weekend tumble.
The growth of the VN-Index narrowed from 10 per cent earlier to 8 per cent on Friday.
Liquidity staying in positive zone indicates that investors have not panicked, according to analysts at BIDV Securities Company (BSC).
The daily trading volume in a session reached 263.6 million shares worth a combined VND4.6 trillion (nearly US$202 million) on the two exchanges, up two per cent in volume but down six per cent in value compared to the previous week’s average figures.
“The market will likely recover early this week if there is no more negative news around the world,” BSC analysts wrote in a note, but warned of a possible steeper correction if the VN-Index could not recover to the 720 point level.
Information on annual shareholders’ meetings and earnings reports of listed companies continue to be released but the impact on the market has reduced. Shares with good information have had mixed responses with up-and-down sessions.
Prolonged net buys by foreign investors are expected to continue supporting the local market.
Excluding the value of the unexpected buys in shares of seafood processor Vinh Hoan Corp (VHC), foreign investors were responsible for a total net buy value of over VND1.04 trillion on the HCM City exchange. Their purchases were still concentrated on major large-cap stocks like steelmaker Hòa Phát Group (HPG), Vinamilk (VNM) and VinGroup (VIC).
They were net sellers on the Hanoi Stock Exchange for a modest VND42.3 billion.
Foreign investors have been net buyers on the local stock market since the beginning of this year, picking up securities worth a total of $554 million in the first three months, including stocks and bonds, according to a report by the National Financial Supervisory Commission.