Stocks to move up, but lack of info could bite

While stocks are set to rise this week, concerns remain as listed companies are about to finish releasing their second-quarter earnings reports, putting the market in a period where there is not much information forthcoming, analysts say.

Investors at MBS Securities in Hà Nội. - VNS Photo Trương Vi

Investors at MBS Securities in Hà Nội. - VNS Photo Trương Vi

The benchmark VN Index on the HCM Stock Exchange gained 0.72 per cent to close at 777.09 points, rebounding from Thursday’s loss of 0.3 per cent.

The HNX Index on the Hà Nội Stock Exchange rose 0.93 per cent to end at 100.55 points. The northern market index has rallied 3.7 per cent in the last four sessions.

The two local indices also posted weekly gains after Friday. The VN Index rose 2 per cent for the week and the HNX Index increased by 2.6 per cent.

Both local bourses underwent a week of strong movement as large-cap stocks, especially bank stocks, surged strongly, supporting the market’s uptrend.

Among the nine listed banks, the biggest gainers were Bank for Investment and Development of Việt Nam (BID), MB Bank (MBB) and Sacombank (STB).

These three bank stocks made weekly gains of 9.1 per cent, 15.7 per cent and 9.4 per cent, respectively.

Other listed bank stocks such as Vietcombank (VCB), Vietinbank (CTG), Asia Commercial Bank (ACB) and Eximbank (EIB) rose at lower rates.

The positive gains in bank stocks helped improve investor confidence in other leading sectors like securities and insurance companies and leading firms like property developer Vingroup (VIC) and dairy producer Vinamilk (VNM).

According to analysts at Bảo Việt Securities (BVSC), weekly gains of both local indices proved that “the risk of a short-term sharp decline was significantly minimised.”

The VN Index is expected to move positively this week on the back of investor optimism, BVSC said in its weekly report.

The Hà Nội-based brokerage added that the next resistances for the VN Index are the level of 775 points and the range of 783-785 points.

Lack of info

Meanwhile, some analysts and securities firms have expressed concerns over the possibility of a decline for in both local indices as the market enters August – a month that lacks business information from listed companies and the market nearly runs out of positive news from second-quarter earnings reports.

Analysts at BIDV Securities Co (BSC) said in a note that the current gains were not stable as market trading liquidity did not increase relatively, raising concerns about possible declines in the near future.

An average of more than 256.9 million shares, worth VNĐ4.33 trillion (US$192.8 million), were traded in each session last week.

Last week’s average daily trading figures were both 8.9 per cent lower in trading volume and value compared to the previous week.

“Technical signals suggest we take a cautious look at market movements as it approaches previous short-term peaks this week, once trading liquidity shows no sign of improvement.”

BSC was also worried about the second-quarter earnings-report effect, which seems to have run out since the financial statements released for the second quarter and first half of the year were not convincing enough.

"Stocks had grown significantly in the first half of the year, reflecting investor expectations in the business prospects," said Võ Văn Cường, leading analyst at Martime Securities (MSI).

Therefore, investors may have less chance to look for new investment opportunities and they will now focus on selling to earn profits, he said.

An additional 218 companies on both local exchanges have announced their second-quarter earnings reports, bringing the total number of companies doing so to 545 or 76 per cent of total listed firms.

In terms of results, total post-tax second-quarter profit inched up just 0.1 per cent to VNĐ17.9 billion, a significant decrease from the growth rate of 10 per cent seen in the previous week.

The top five companies on the stock market in terms of profit earned are MBBank, Vietcombank, Vicostone and Kido. MBBank posted the biggest yearly profit increase of VNĐ308 billion.

Meanwhile, the three companies whose profits grew at a slower rate are steel producer Hòa Phát Group (HPG), Ocean Group (OGC) and PetroVietnam Technical Services (PVS). HPG posted a yearly decrease of VNĐ488 billion in its post-tax profit.


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